This section offers advice-based ebooks and digital textbooks on the ownership and organization of enterprises.
An enterprise’s owner has two formal rights; the right to control the firm and the right to control the firm’s profits or earnings. He/she can only control the net earnings, that is, the earning that remain after paying all immediate costs, such as wages, interest payments and supply prices.
Formal control generally involves only the right to elect the firm’s board of directors, and also to vote on a small set of fundamental issues, such as merger or dissolution of the firm. However, in large business corporations, the shareholders are often too high in number and too dispersed to exercise this control, resulting in corporate managers having most of the substantial control.
Nearly all large firms have owners who are also considered patrons. This is typical of consumer and producer cooperatives, which by definition are enterprises that are owned by their customers and suppliers.
However, not all firms have owners. In non-profit firms, in particular, the people who have control are barred from receiving residual earnings, obviously! The same factors that determine the most efficient assignment of ownership also determine when it’s appropriate for an enterprise to have no owners at all.
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