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Companies abound in the national economy; ranging from the small family or partnership concern to the faceless multinational corporation, they provide the structural frame work of the modern industrial society

Company is a legal entity, allowed by legislation, which permits a group of people, as shareholders, to apply to the government for an independent organization to be created, which can then focus on pursuing set objectives, and empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money. This is an association of a number of individuals for the purpose of carrying on some legitimate business.

Company is also known as a corporation. The word company is often mistakenly used to refer generically to any for-profit business: a sole proprietorship, a partnership or a corporation. This promotes confusion and has led many jurisdictions to prefer and defer to the term corporation.” ¹ Some jurisdictions such as England continue to use the term company when referencing the legal entity other refers to as a corporation. “In Gower’s Principles of Modern Company Law, a 1997 English law book, the author notes that-the generic definition of the word company is: An association of a number of people for some common objects.”²

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1 Davies, Paul, Gower’s Principles of Modern Company Law, 6th Ed., (London: Sweet & Maxwell, 1997), page 3.

2 In Gower’s Principles of Modern Company Law, a 1997 English law book, the author notes that the generic definition of the word company is: An association of a number of people for some common objects.” (I)n common parlance, the word company is normally reserved for those associated for economic purposes; i.e. to carry on a business for gain.

Introduction

The term Company is used to describe an association of a number of persons, formed for some common purpose and registered according to the law relating to companies.
Lord Justice Lindley defines: “By a company is meant associations of many persons who contribute money or money’s worth to a common stock and employ it for a common purpose.³

A company according to the new socioeconomic thinking is asocial institution having duties and responsibilities towards the community in which it functions. Setting up a company is governed by the Companies act 1985, ss 10-13 and is a relatively simple process.⁴

The main objects and purposes of statutes relating to companies are as follows:⁵

Encourage investments in companies by providing certain facilities, e.g., limitation of liability, transferability of shares etc.

Ensure due and proper administration of the funds and assets of companies in the interest of the investing public.

Present malpractices by directors and managers.

Arrange for investigation into the affairs of companies and provide for effective audit in dealing with cases of dishonesty and fraud in the corporate sector.

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3Chief justice John Marshall Supreme Court of America, Dartmouth College vs. Woodward 1819

4 Commerce its theory and practice

5 Introduction to company law M. H. Bukhari p-6

Partnership

A partnership is owned by a small number of individuals. A partnership is a form of unincorporated business with multiple individuals (partners) managing and liable for debts. This is different from a Limited Liability Company (LLC) or corporation, in that each individual partner shares an equal amount of responsibility for the debts, liabilities, profits, and losses of the business. These may cover limited liability partnerships, limited partnerships, and general partnerships.”On the other hand, however, there is federal law for partnership taxation, based on the Internal Revenue Code (IRC).” ⁶

Sole proprietorship

A sole proprietorship also known as a sole trader or simply proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner (subject to taxation). “All assets of the business are owned by the proprietor and all debts of the business are his debts and he must pay them from his personal resources it is a “sole” proprietorship in the sense that the owner has no partners (partnership).”⁷ A sole proprietor may do business with a trade name other than his or her legal name. This also allows the proprietor to open a business account with banking institutions.

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6 “English law provides two main types of organization for such associations: partnerships and companies. Although the word company is colloquially applied to both, the modern English lawyer regards companies and company law as distinct from partnerships and partnership law.”

7 Commerce its theory and practice Dr. S. Evelyn Thomas. P.

Multinational Corporation

“A multinational corporation (MNC) or transnational corporation (TNC), also called multinational enterprise (MNE) is a corporation or enterprise that manages production or delivers services in more than one country.”⁸ It can also be referred to as an international corporation.”Large multinational corporations can have a powerful influence in international relations, given their large economic influence in politicians’ representative districts, as well as their extensive financial resources available for public relations and political lobbying.” ⁹Multinational corporations can have a powerful influence in local economies as well as the world economy and play an important role in international relations and globalization. “According to Howard Perl mutter (1969) Multinational companies may pursue policies that are home country-oriented or host country-oriented or world-oriented.” ¹⁰

Multinational corporations are increasingly seen as excessively big and powerful, and as having dramatically increased in size and power. Multinationals are out of favor.

“Conceptually there are five ways in which a multinational corporation (MNC) can serve a foreign market:

Invest directly by a Greenfield venture,
Invest directly by acquiring a local firm,
Invest directly by starting a joint venture with a local firm,
Enter into a strategic alliance with a local firm.

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8 The uniform partnership Act of America sec 6(1)

9 Crystal Reference Encyclopedia. Crystal Reference Systems Limited. 27 Nov. 2007. Reference.com

10 Chief justice John Marshall Supreme Court of America, Dartmouth College vs. Woodward 1819

Economic power of MNC

The multinationals are not as big as we thought and that they have not grown faster than the nation states does not say much about the power of these multinationals. The latter may exert considerable power, and this power may have increased. Although size and power are correlated, the correlation is far from perfect. “Certainly, the perception today (again) is that the power of multinationals is large and that this power has increased. Contrary to size, power is difficult to measure”¹¹. We can only infer indirectly how large this power is. In this connection it is useful to distinguish between economic and political power.

The extent to which corporations are capable of doing this depends on two factors. One is the degree of substitutability of the products these corporations sell.The second factor is competition. The smaller the number of competitors the higher the capacity of corporations to charge a price above marginal costs and to make excess profits. In the limit of monopoly power, this capacity is at its highest. “A successful corporation is the one, which drives out competitors because of a better and/or cheaper product.”¹²

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^{11 a} b Black’s Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.

12 Crystal Reference Encyclopedias. Crystal Reference Systems Limited. 27 Nov. 2007. Reference.com

Multination Companies & their impact on economy

1) Unilever:

Unilever is a multi-national corporation, formed of British and Dutch parentage that owns many of the world’s consumer product brands in foods, beverages cleaning agents and personal care products. “Unilever is a dual-listed company consisting of Unilever NV in Rotterdam, The Netherlands and Unilever PLC in London, The United Kingdom. Unilever’s main competitors include Procter & Gamble, Nestlé, Kraft Foods, Mars, Reckitt Benckiser, Henkel and Spotless Group.”¹³

Economic impacts:

Their business generates wealth by adding value to the raw materials we purchase, as we manufacture products to exacting standards and market them to consumers. Employees, governments, investors and many others in the communities where we operate benefit economically from our activities. “In 2008, out of €40.5 billion sales income (turnover), we spent over €29.3 billion with suppliers and so created €11.2 billion value added through our operations. Their employees gained the largest share, earning €5.3 billion of the total.” ¹⁴ The providers of capital who finance our operations gained the second-largest share from dividends paid.Unilever South Africa is responsible for a number of other important economic effects as well. The direct, indirect, and induced effects of Unilever South Africa operations on govt. tax revenues.”¹⁵

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^13. Unilever Annual Report 2008

14 ^.Subs (4) were added by the company Act 1948 16^th sched.

15 Introduction to business Dr. Raymond E. Glos & Dr. Harold A Baker

2) Nestlé:

“Nestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland, and listed on the SWX Swiss Exchange with a turnover of over 87 billion Swiss francs.”¹⁶

“The two world wars both affected growth: during the first, dried milk was widely used but the second war caused profits to drop by around 70%. However, sales of the instant coffee Nescafé were boosted by the US military”^17.After the wars, growth was stimulated by acquisitions expanding its range and taking control of several well known brands, so they now include Maggi, Thomy and Nescafé that are known globally”¹⁸. It is the world’s largest food company, with Kraft Foods being second.

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16 ^.Nestlé Google Analytics www.nestle.com

17. Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge. p. 72.

18. Howard V. Perl mutter, “The Tortuous Evolution of the Multinational Corporation,” Columbia Journal of World Business, 1969, pp. 9-18

3) HSBC:

“HSBC is a public limited company incorporated in England and Wales in 1990, and headquartered in London since 1993”.¹⁹ As of 2009, it is both the world’s largest banking group and the world’s 6th largest company according to a composite measure by Forbes magazine.²⁰ Recent acquisitions and expansion in China are returning HSBC to part of its roots”.²¹ HSBC has an enormous operational base in Asia and significant lending, investment, and insurance activities around the world. The company has a global reach and financial fundamentals matched by few other banking or financial multinationals.”²²

Economic impact

HSBC has a long standing commitment to the environment. They manage their impact on the environment by operating as efficiently as possible and by making wise lending decisions. They also understand that they can do much more. As one of the leading financial institutions, they can invest and profit from projects that advance the transition towards a low-carbon economy. “Climate change represents the single largest environmental, social and economic challenge this century.”²³they will impact HSBC’s customers, employees, and shareholders. It is, therefore, a key focus of HSBC’s sustainability strategy.”²⁴

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¹⁹“Group Structure” HSBC website

^20.“Special Report – The Global 2000,” Forbes, April 2, 2008.

^21.“HSBC tops Forbes 2000 list of world’s largest companies,” HSBC website, 4 April 2008

22^.Vidya Ram, “HSBC Gets Back In Touch With Its Roots” Forbes, 03.10.08

23 HSBC, “HSBC Fact Shee

24www.uae.hsbc.com

4) Tata Group:

Tata Group is one of India’s largest and most respected business groups. Tata Group’s name is synonymous with India’s industrialization. The Group gave India her first steel plant, hydro-electric plant, inorganic chemistry plant and created a reservoir of scientific and technological manpower for the country. “Its Trusts have instituted the Tata Institute of Social Sciences in 1936; India’s first cancer hospital, the Tata Memorial in 1941, and in 1945,”²⁵ .the Tata Institute of Fundamental Research, which became the cradle of India’s Atomic energy program.”²⁶ Today, Tata Group comprises 96 operating companies in seven business sectors: information systems and communications; engineering; materials; services; energy; consumer products; and chemicals. The Group has operations in more than 54 countries across six continents, and its companies export products and services to 120 nations.”²⁷

Tata gets more than half of its revenue from outside India. It started as a small company but now it has become a role model for all the business companies. Tata has shown India a new successful era of business and directed India towards a cost-effective and gainful economy.

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25 Arun Kumar Sen, Jitendra Kumar Mitra .Commercial Law and Industrial Law, , pg-565, paragraph- 4

26 [1] Alan Dignam John Lowry Nicola Padfield. Company Law. Pg-7. paragraph- 4

27 [1] http://www.iloveindia.com/economy-of-india/top-50-companies/tata-group.html

Companies in Bangladesh

Like other countries, Bangladesh also has some successful companies which flourished its economy. “Some of them are Rahim Afrooz, Navana Group, Square etc. These companies were not big as today in the beginning.”²⁸ Day by day they become immense and helped to form the structural framework of the modern industrial society in Bangladesh. If we take the example of “Rahim Afrooz group, it was founded in 1954 by Late A. C. Abdur Rahim as a trading company.[1] But now its one of the largest business groups in Bangladesh.”²⁹

National Economy

“ National economy is an economy (or “the economy”) is the realized economic system of a country or other area. It includes the production, exchange, distribution, and consumption of goods and services of that area.”³⁰ A given economy is the end result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, among other factors. These factors give context, content, and set the conditions and parameters in which an economy functions. Practical fields directly related to the human activities involving production, distribution, exchange, and consumption of goods and services as a whole, range from engineering to management and business administration to applied science to finance.

All kind of professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving and investment are core variable components in the economy and determine market equilibrium. “Scotsman Adam Smith (1723-1790). He defined the elements of a national economy: products are offered at a natural price generated by the use of competition – supply and demand – and the division of labour. Thomas Malthus (1766-1834) transferred the idea of supply and demand to the problem of overpopulation.” ³¹

The United States of America became the place where millions of expatriates from all European countries were searching for free economic evolvement.”In Europe wild capitalism started to replace the system of mercantilism (today: protectionism) and led to economic growth”³². The period today is called industrial revolution because the system of production and division of labour enabled the mass production of goods.” ³³

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31^“Sullivan, arthur; Steven M. Sheffrin (1996). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pg 57 and 305.

32“User’s guide: Background information on GDP and GDP deflator”. HM Treasury. http://www.hm-treasury.gov.uk/data_gdp_backgd.htm.

33 http://uk.reuters.com/article/idUKTRE56F0H020090716

Conclusion

The world’s economy is getting more complex day by day. Globalization has made it more competitive. In this competitive world, it’s not so easy for nations to gain success. But companies made it much easier for them³⁶. For these companies, national economies flourish more day by day. These companies grow more and more with time and help nations to boom their economy. And above all, these companies provide the structural framework of the modern industrial society which is the most beneficial part for the economy and for the individual countries as well.³⁷

“FDI traditionally implies export of real capital from home to the host nations, but even when economic investments results from FDI, capital may not be transferred from the home nation to the host one” ³⁴. Rather Multinational Corporation may acquire or utilize real capital from local sources or third nation. Finally, we argued that there is little evidence that the economic and political power of multinationals has increased in the last few decades. “Multinationals have not grown in size relative to the nation-states nor have they become more powerful in the last twenty years.” ³⁵ And yet the perception is very different. This leads to the conclusion that what has changed is not the economic reality. The big transformation has been in the perception of that reality.

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34 Concepts and Methods of the U.S. National Income and Product Accounts”. Bureau of Economic Analysis. 2008-7 attachment:/295/GDP.htm#cite_note-0

35 Subs (4) were added by the company Act 1948 16^th sched.

36 Repealed except as applied by sub (1) of s 115 see company Act 1948 17^th sched. Pt II

37 Repealed except as applied by sub (4) of s 115 see company Act 1948 17^th sched. Pt II

Bibliography

ü “Sullivan, Arthur; Steven M. Sheffrin (1996). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pg 57 and 305.

ü User’s guide: Background information on GDP and GDP deflator”. HM Treasury. http://www.hm-treasury.gov.uk/data_gdp_backgd.htm.

ü “Measuring the economy: A primer on GDP and the national Income and product accounts”. Bureau of Economic Analysis.

ü Anderson, Sarah, and John Cavanaugh, the Rise of Corporate Global Power, Institute for Policy Studies, Dec. 2000.

ü Klein, Naomi, No Logo, Flamingo, London, 2001.

ü Hertz, Noreena, the Silent Take-Over, William Heinemann, London, 2001, 242pp.

ü http://www.bea.gov/national/pdf/nipa_primer.pdf.

ü Davies, Paul, Gower’s Principles of Modern Company Law, 6th Ed., (London: Sweet Maxwell, 1997), page 3.

ü Chief justice John Marshall Supreme Court of America, Dartmouth College vs. Woodward 1819

ü Commerce its theory and practice

ü Introduction to company law M. H. Bukhari p-6

ü Black’s Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.

ü Companies Act 2006

ü Crystal Reference Encyclopedia. Crystal Reference Systems Limited. 27 Nov. 2007. Reference.com Commerce its theory and practice Dr. S. Evelyn Thomas. P.48

ü Introduction to business Dr. Raymond E. Glos & Dr. Harold A Baker

ü John Micklethwait and Adrian Wooldridge, The Company: a Short History of a Revolutionary Idea (New York: Modern Library, 2003)

ü Sheila C. Dow (2005), “Axioms and Babylonian thought: a reply”, Journal of Post Keynesian Economics 27 (3), p. 385-391.

ü http://history-world.org/reforms_of_urukagina.htm

ü Aristotle, Politics, Book I-IIX, translated by Benjamin Jowett

ü Barnes, Peter, Capitalism 3.0, A Guide to Reclaiming the Commons, San Francisco 2006 [2]

ü Stiglitz, Joseph E., Global public goods and global finance advancing Public Goods, Jean-Philippe Touffut, (ed.), Paris 2006, pp. 149/164.

ü “GDP: Gross Domestic Product.” http://www.dismal.com/toolbox/dict_gdp.stm. (1999).

ü Mansfield, Edwin, and Behravesh, Nariman. (1992). Economics U$A, 3rd Ed. New York: Norton.

ü Ming’s, Turley, and Marlin, Matthew. (2000). the Study of Economics: Principles, Concepts, and Applications, 6th ed. Dushkin/McGraw-Hill.

ü Business an introductory analysis Prof. Bayared O Wheeler

ü Subs (4) were added by the company Act 1948 16th sched.

ü Repealed except as applied by sub (1) of s 115 see company Act 1948 17th sched. Pt II

ü Repealed except as applied by sub (4) of s 115 see company Act 1948 17th sched. Pt II

ü Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge. p. 72.

ü Howard V. Perl mutter, “The Tortuous Evolution of the Multinational Corporation,” Columbia Journal of World Business, 1969, pp. 9-18

ü Dunning, J.H (1993) Multinational Enterprises and the Global Economy: Addison- Wesley.

ü Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge. p. 72.

ü Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Hymer (1960, published in 1976), Kindle Berger (1969) & Caves (1971). Routledge. p. 74.

ü Pitelis, Christos; RogerSugden (2000). The nature of the transnational firm. Hymer, 1976 49-50.Routledge.P. 74.

ü Unilever Annual Report 2008

ü Nestlé Google Analytics www.nestle.com

ü www.hsbc.com

ü http://uk.reuters.com/article/idUKTRE56F0H020090716

ü www.uae.hsbc.com

ü “Concepts and Methods of the U.S. National Income and Product Accounts”. Bureau of Economic Analysis. 2008-07 attachment:/295/GDP.htm#cite_note-0

ü P. Todaro, Michel. Economic development. 4^th and 8^th Ed

ü M. Schmitthoff, Clive. Company law of grays Inn.

ü S. 459 and scheds. XVII and XVIII

ü Ibid, S.36

ü Cmd. 6659/1945

ü S 459(1) and sched VII

ü Cmd. 2657/1926

ü Cmd. 3052/1906

ü 1889 14app.cas.337

ü Arun Kumar Sen, Jitendra Kumar Mitra .Commercial Law and Industrial Law ( Including Company Law ). 26^th Edition. The World press.

ü Alan Dignam, John Lowry, Nicola Padfield. Company Law. 4^th Edition. Oxford University Press.

ü http://banglapedia.search.com.bd/HT/C_0324.htm

ü http://en.wikipedia.org/wiki/Tata_Group

ü http://www.iloveindia.com/economy-of-india/top-50-companies/tata-group.html

ü http://en.wikipedia.org/wiki/Rahimafrooz

“Companies abound in the national economy; ranging from the small family or partnership concern to the faceless multinational corporation, they provide the structural frame work of the modern industrial society”

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1 Davies, Paul, Gower’s Principles of Modern Company Law, 6th Ed., (London: Sweet & Maxwell, 1997), page 3.

Introduction

The main objects and purposes of statutes relating to companies are as follows:⁵

Encourage investments in companies by providing certain facilities, e.g., limitation of liability, transferability of shares etc.

Ensure due and proper administration of the funds and assets of companies in the interest of the investing public.

Present malpractices by directors and managers.

Arrange for investigation into the affairs of companies and provide for effective audit in dealing with cases of dishonesty and fraud in the corporate sector.

____________________________________________________

3Chief justice John Marshall Supreme Court of America, Dartmouth College vs. Woodward 1819

4 Commerce its theory and practice

5 Introduction to company law M. H. Bukhari p-6

Partnership

Sole proprietorship

________________________________________

7 Commerce its theory and practice Dr. S. Evelyn Thomas. P.

Multinational Corporation

Multinational corporations are increasingly seen as excessively big and powerful, and as having dramatically increased in size and power. Multinationals are out of favor.

“Conceptually there are five ways in which a multinational corporation (MNC) can serve a foreign market:

Invest directly by a Greenfield venture,
Invest directly by acquiring a local firm,
Invest directly by starting a joint venture with a local firm,
Enter into a strategic alliance with a local firm.

______________________________________________

8 The uniform partnership Act of America sec 6(1)

9 Crystal Reference Encyclopedia. Crystal Reference Systems Limited. 27 Nov. 2007. Reference.com

10 Chief justice John Marshall Supreme Court of America, Dartmouth College vs. Woodward 1819

Economic power of MNC

^{_______________________________________________________________}

^{11 a} b Black’s Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.

12 Crystal Reference Encyclopedias. Crystal Reference Systems Limited. 27 Nov. 2007. Reference.com

Multination Companies & their impact on economy

1) Unilever:

Economic impacts:

___________________________________________________

^13. Unilever Annual Report 2008

14 ^.Subs (4) were added by the company Act 1948 16^th sched.

15 Introduction to business Dr. Raymond E. Glos & Dr. Harold A Baker

2) Nestlé:

“Nestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland, and listed on the SWX Swiss Exchange with a turnover of over 87 billion Swiss francs.”¹⁶

___________________________

16 ^.Nestlé Google Analytics www.nestle.com

17. Pitelis, Christos; Roger Sugden (2000). The nature of the transnational firm. Routledge. p. 72.

18. Howard V. Perl mutter, “The Tortuous Evolution of the Multinational Corporation,” Columbia Journal of World Business, 1969, pp. 9-18

3) HSBC:

Economic impact

_______________________________

¹⁹“Group Structure” HSBC website

^20.“Special Report – The Global 2000,” Forbes, April 2, 2008.

^21.“HSBC tops Forbes 2000 list of world’s largest companies,” HSBC website, 4 April 2008

22^.Vidya Ram, “HSBC Gets Back In Touch With Its Roots” Forbes, 03.10.08

23 HSBC, “HSBC Fact Shee

24www.uae.hsbc.com

4) Tata Group:

______________________________________

25 Arun Kumar Sen, Jitendra Kumar Mitra .Commercial Law and Industrial Law, , pg-565, paragraph- 4

26 [1] Alan Dignam John Lowry Nicola Padfield. Company Law. Pg-7. paragraph- 4

27 [1] http://www.iloveindia.com/economy-of-india/top-50-companies/tata-group.html

Companies in Bangladesh

Like other countries, Bangladesh also has some successful companies which flourished its economy. “Some of them are Rahim Afrooz, Navana Group, Square etc. These companies were not big as today in the beginning.”²⁸ Day by day they become immense and helped to form the structural framework of the modern industrial society in Bangladesh. If we take the example of “Rahim Afrooz group, it was founded in 1954 by Late A. C. Abdur Rahim as a trading company.[2] But now its one of the largest business groups in Bangladesh.”²⁹