A corporation is a licit organization that is separate and clear from its owners. Corporations have most of the rights and responsibilities that individuals enjoy by entering commitments, borrowing loans and money, hiring employees, own assets, and pay taxes.
Types of corporates:-
There are three types of corporates-
Open corporates, Close corporates, and Liquidity
- Open corporates-
Open corporates are the corporates where exchanges on the public market are available for those who have ownership shares. The organized market like the New York Stock Exchange, the American Stock Exchange, is the organized market where the shares are traded. These transactions involve shares in those companies that are not recorded on trade, but their shares are available for public trading.
2. Close Corporates-
A close corporation is a corporation whose proprietorship shares are not available for trade on any public market. Shamika Staggs Have such a transaction is permitted, the shares of a close corporation may be exchanged in a private transaction. The director and the shareholders of the close companies are obliged to proceed with the full elegance of any transaction that affects other investors. They are placed under the total control of the shareholder, without the ease of exchange provided by the public market.
Liquidity can be considered as the ease with which the shareholders can exchange their interests in the company. The shares which can be easily sold and exchanged into cash are called high liquidity. On other hand, the shares which cannot be sold easily and exchanged into cash are called low liquidity. The public companies have the most “liquidity” and they trade on organized exchanges. Highly liquid investments are considered to those close companies that have a small number of shareholders.
4. Corporation Ownership:-
When you work with your corporate clients you need to be aware of the nature of your ownership. Because there are many several reasons for this fundamental issue. Perhaps the management and operation of the close and open corporations are the same, but the treatment of both is quite different.
Author — Shamika Staggs
Shamika Staggs is a 36 year old female with two kids. She used to work a 9–5 however now She Have Own two businesses. She is also a successful forex day/night.