Page 167 - Business Principles and Management

Unit 2

in this text apply equally to managers who run profit-making as well as non-
profit corporations.

QUASI-PUBLIC CORPORATIONS
A business that is important to society but lacks the profit potential to attract
private investors is often operated by local, state, or federal government.
Government financial support (called a subsidy) may also be required. This type
of business is usually described as a quasi-public corporation. Government
imposes regulatory controls over quasi-public corporations.
The Tennessee Valley Authority, a rural electrification program started in the
1930s by the federal government, was one of the first quasi-public corporations.
The organizations that run interstate highways, such as the Massachusetts and
Pennsylvania turnpike authorities, are state-owned quasi-public corporations.
At the local level, examples of quasi-public organizations include water and
sewer systems, parking garages, and civic and cultural facilities. The Los Angeles
County Museum of Art is a government-owned cultural organization.

CHECKPOINT

List the main advantage of choosing an LLC or Subchapter S status.

6.3 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Circle the best answer for each of the following questions.
1. Organizations that are specialized alliances between companies
or individuals include all of the following except
a. joint ventures
b. virtual corporations
c. cooperatives
d. LLCs
2. A corporation can have a special tax status by filing as a(n)
a. LLC
b. Subchapter S corporation
c. nonprofit corporation
d. all of the above

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Explain the advantages of structuring a virtual corporation.
4. Explain why a company would elect to have an
LLC or Subchapter S status.

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