IMO STATE UNIVERSITY

SCHOOL OF POST GRADUATE STUDIES

FACULTY OF LAW

A SEMINAR PRESENTED IN PARTIAL FULFILLMENT

OF THE REQUIREMENT FOR THE AWARD OF DOCTOR
OF PHILOSOPHY IN LAW (PhD)

NAME: CHUKWU, OMEOGA UGORJI

COURSE: INTERNATIONAL ECONOMIC LAW

TOPIC: ECONOMIC INTEGRATION SCHEMES

LECTURER: ASSOC. PROF. ONYEMA OTITODIRI

SESSION: 2023/2024

SEMESTER FIRST SEMESTER

DATE: APRIL, 2024

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 TABLE OF CONTENT

Abstract …………………………………………………………………………….. 1

Introduction ……………………..…………………………………………………… 4

Forms of Corporation ……………………………………………………………………. 5

Advantages of Corporation………………………………………………………………. 6

Disadvantages of Corporation………………………………………………………… 7

How to operate/Run a Corporation ……………………………………………………. 8

How to maintain the corporation status……………………………………………….. 9

How to dissolve a corporation…………………………………………………………… 9

Challenges faced by corporations………………………………………………….. ….. 9

Recommendations……………………………………………………………………. 11

Conclusion:…………………………………………………………………………………

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 ABSTRACT:

Economic integration schemes have become a prevalent feature of the

global economy, with various regions around the world engaging in different
forms of integration to promote economic growth and development. This
paper aims to provide a detailed analysis of economic integration schemes,
focusing on their types, benefits, challenges, and impact on participating
countries.

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INTRODUCTION

Economic integration is an arrangement among nations that typically includes the reduction or

elimination of trade barriers and the coordination of monetary and fiscal policies. Economic

integration aims to reduce costs for both consumers and producers and to increase trade between

the countries involved in the agreement.1

that sets forth how decisions will be made, profits will be shared, disputes resolved and how

future partners will be admitted to the partnership, how partners can be bought out or what steps

will be taken to dissolve partnership when needed.1 Different types of partnership include general

partnership, Limited partnership or partnership with limited liability and joint venture.

Limited Liability Company

This is a relatively new type of hybrid business structure that is now permissible in most

countries. It is designed to provide limited liability features of a corporation and the tax

efficiencies and operational flexibility of a partnership. Its formation is more complex and formal

than that of a general partnership. Limited Liability Company’s must not have more than two of

the four characteristics that define corporations which is being limited to the extent of assets,

continuity of life, centralization of management and free transferability of ownership interests. 2

The focus of this research is the Legal forms of Coporation in economic relations hence we are

going to discuss extensively on coporation as a form of business organization in relation to the

economy. This paper takes us through the meaning/definition of corporation, forms of

corporation, the advantages and disadvantages therein, how to operate a corporation, how to
1
Pressbooks. "Core Principles of International Marketing: 2.4 Regional Economic Integration."

2
Baltimore City Source Link “Forms of Business Organization” www.baltimoresourcelink.com Accessed on 31st of
March, 2024.

3
maintain the corporation status and how to dissolve a corporation. It went further to outline the

challenges facing a corporation which is common to to every business organization and

thereafter made recommendations on how to tackle these challenges. It then concluded by

strongly opining that corporation is the best form of business organization because its

advantages or merits far outweighs its disadvantages.

MEANING / DEFINITION OF COPORATION.

A corporation is a legal entity created by individuals, stockholders or shareholders with the

purpose of operating for profit3. Owing to the fact that not all corporations are for profit making,

it will be safer to succinctly put that a corporation is a legal entity that is separate and distinct

from its owners. The creation of a corporation involves a legal process called incorporation

where legal documents containing the primary purpose of the business, name and location, and

the number of shares and types of stock issued, are drafted. 4 This process of incorporation gives

the business entity a distinct feature that protects its owners from being personally liable in the

event of lawsuit or legal claim.5

A corporation can also be said to be a business organization that acts as a unique and separate

entity from its shareholders. A corporation pays its own taxes before distributing profits or

dividends to shareholders6. It is considered by law to be a unique entity, separate and apart from
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those who own it. A corporation can be taxed, sued and can enter into contractual agreements.

Common examples of corporations include a business organization that possesses a board of

3
Though some corporations such as charities and fraternal organizations are non profit or not-for-profit.
4
A corporation is created when it is incorporated by a group ofshareholders with a common goal who share
ownership represented by their holding of stock shares.
5
CFI Team, corporatefinanceinstitute.com Accessed on march 29th, 2024.
6
Indeed Editorial Team, “Major forms of Business Organizations (With Examples)” (2023)www.indeed.com Accessed
2nd April, 2024.
7
The owners of a coporation are its shareholders who elect a board of directors to oversee the major policies and
decisions.

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directors and a large company that employs hundreds of people. About half of all corporations

have at least 500 employees.

The Legal life of a Corporation is perpetual. Corporations are a separate legal entity from the

owners or shareholders and as long as the corporation is in legal status, it is considered active. 8

Legal status includes:

 Continuity of life

 Centralized management

 Limited liability

 Transfer of interests.9

FORMS OF CORPORATION

There are three main forms of corporations:

1. C corporation

This is the most common form of incorporation among businesses and contains almost all

of the attributes of a corporation. Owners receive profits and are taxed at the individual

level while the corporation itself is taxed as a business entity. A C Corporation is a fully

separate legal entity, responsible for paying corporate taxes and issuing annual reports. It

must also appoint a board of directors.

2. S corporation

This is created in the same way as a C corporation but is different in owner limitation and

tax purposes. An S corporation consists of up to 100 shareholders and is not taxed as

8
University of Otttawa “Legal life of a Corporation: Everything you need to know” www.upcounsel.com
9
Ibid.

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 separate instead , the profits/losses are shouldered by the shareholders on their personal

income tax returns.

3. Non-Profit Corporation

This is commonly used by charitable, educational and religious organizationsto operate

without generating profits. A non-profit is exempt from taxation. Any contributions,

donations or revenue received are retained in the entity to spend on operations,

expansion or future plans.10

ADVANTAGES OF COPORATION

1. Separate legal entity

Corporations are independent from its owners and considered a legal entity that may

conduct business, own properties, enter into binding contracts , borrow money, sue

and be sued and pay taxes.

2. Unlimited life

Stockholders, shareholders or members are the owners of a corporation and it is

managed by a board of directors. Their death or inability to perform their duties does

not affect the continuity of this legal entity; only changes in the company’s charter

will enable it to either be extended or liquidated.

3. Owners are not responsible for business debts

The shareholders of a corporation are not liable for its debts instead shareholders risk

their equity.

4. Limited liability

10
CFI Team coporatefinnceinstitute.com Accessed 24th March, 2024.

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 Company owners are only liable for the amount they invested. Creditors and lenders

have no claim to the owners’ personal assests for payments owed by shareholders.

5. Easy transfer of ownership shares

Publicly held corporations do not require approval from other stockholders to sell the

stocks or shares of individual owners. Stocks or shares can be easily traded in the

market regardless of their volume.

6. Competent Management.

Investors or owners may not handle day to day business operations. They vote for the

board of directors who eventually hire a professional management team.

7. Tax exemptions

Corporations can deduct expenses related to company benefits including health

insurance premiums, wages, taxes, travel, equipment and more.

8. Quick capital through stocks

To raise additional funds for the business, shareholders may sell shares in the

corporation. Corporations can source funds from selling stocks and issuing bonds.

DISADVANTAGES OF COPORATION

1. Incorporation costs

It is costlier to go through the process of incorporation than to form a sole

proprietorship or partnership.

2. Documentation

Aside from incorporation documents, companies must file annual reports and tax

returns as well as maintain accounting records, licenses and other important

documents.

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 3. Double taxation for C-corporations

The corporation must pay income taxat the corporate rate before profits transfer to the

shareholders who must then pay taxes on an individual level.

4. Annual record keeping requirements

With the exception of an S-corporation, the corporate business structure involves a

substantial amount of paperwork.

5. Owners are less involved than managers

When there are several investors with no clear majority interest, the management team

may direct business operations rather than the owners.

HOW TO OPERATE/RUN A CORPORATION

A corporation is required to name a board of directors before it can commence

operations and the members of the board of directors are elected by shareholders

during the annual general meeting. The shareholders of a corporation receive one vote

per share and they are not required to take part in the day to day running of the

corporation. The board hires and oversees the senior management responsible for the

corporation’s day to day activities.

The board of directors executes the corporation’s business plan. Although members are

not are not personally responsible for the corporation’s debts, they owe a duty of care

to the corporation and can incur personal liabilities if they neglect this duty.11

HOW TO MAINTAIN THE COPORATION STATUS

To maintain the corporation status, the following must occur:12

11
The Investopedia Team “ Corporation: What it is and how to form one” www.investopedia.com Accessed on 2nd
April,2024.
12
University of Ottawa “Legal life of a Corporation: Everything you need to know” www.upcounsel.com

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  Hold annual corporate meetings

 Record meeting minutes

 Issue stock certificates to shareholders

 Elect a Board of Directors

 Ratify and confirm the existing Directors status.

HOW TO DISSOLVE A CORPORATION.

The life of a corporate entity lasts until there is a change in t=its charter or the purpose of

its existence has reached its peak. A process called liquidation 13 will serve the transition,

facilitated by a liquidator.

The corporate assets will be sold and the proceeds will first go to creditors to pay off

debt. Whatever remains will be given to the shareholders. Involuntary liquidation is

usually triggered by creditors of an insolvent or bankrupt company.

CHALLENGES FACED BY CORPORATIONS

A challenge is a situation that threatens to hinder or derail a business pursuit of success.

Corporation like other forms of organization has its own set of demands and challenges.

Some of these challenges span sectors and industries and are common among different

companies and organizations. All businesses strive to maintain to maintain top-quality

relationships with their customer base , to keep their brands relevant and to keep their
13
This is the selling of the assets of a business as part of the process of dissolving the business.

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employees happy. Facing and overcoming challenges that arise is what sets a good

business apart from its competitors.

Some of these challenges include:

(a) Maintaining quality customer relationships.

Our society has become more consistently connected as technology has evolved. With

advertising, re-targettng , social media, online shoping and cell phones, information

has never been more immediately available than it is now.

(b) Meeting customer needs

Meeting customer needs includes asking for customer feedback, acting on their

suggestions and making an effort to change or update products and services to serve

them better. Customers are more likely to recommend businesses that are known for

supplying excellent customer service. Being aware of what the Customer is looking

for and how they want to get it is an important part of being successful business. As a

business grows, it is important for management to continue to prioritize the needs of

their clientele.

(c) Preserving a good reputation

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 Today , customer’s reviews and impressions of businesses are frequently spread

using the internet. One of the most challenging aspects of monitoring your reputation

is knowingwhere you need to look. The business owner should be responsive to

both positive and negative reviews. When a customer is happy, you may want to

thank him but if someone is dissatisfied, you may want to apologizeir offer to help fix

the problem.14

(d) Retaining employees

In recent years, a significant portion of employees tends to switch jobs as often as

every five years. To retain a quality member of the team, it is important to appreciate

their work, supply appealing benefits and offer a competitive salary for their

particular position.15

(e) Finding an effective brand

Branding is a critical part of today’s business world which has gone far beyond

packaging and traditional advertising.

(f) Marketing in a saturated marketplace.

As information becomes more readily available and the public’s attention spans get

shorter, you will have to market strategically to attract potential customers with a

unique and brand.

RECOMMENDATIONS

In light of some of the challenges faced by corporations in today’s world, for an

incorporated business to thrive effectively, the following is recommended:

14
Indeed Editorial Team “6 Challenges Most Businesses Face” www.indeed.com
15
Ibid.

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 1. Diversifying revenue streams

This can help mitigate the impact of any one revenue stream declining. This can include

offering new products or services, expanding into new markets or exploring alternative

revenue sources such as sponsorship or advertising.16

2. Implementing effective marketing and sales strategies

This can help you reach and retain customers by leveraging digital marketing tools,

networking and utilizing customer relationship management (CRM) software .17

3. Building a strong company culture

This can help attract and retain employees, increase productivity and foster a sense of

community and teamwork. This can be done by promoting open communication, offering

flexible work arrangements and encouraging employee involvement in decision making

processes.

4. Embracing technology and innovation

This includes utilizing cloud computing, automating processes and investing in research

and development to bring new products and services to market.

5. Networking

Building relationships with other entrepreneurs and participating in networking events

can provide valuable insights and help entrepreneurs overcome common business

challenges.

CONCLUSION

16
Linked in “How to overcome common business challenges and thrive” www.linkedin.com Accessed on 3rd April,
2024
17
Ibid. this is a software used for buiding and maintaining relationships with customers.

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 Incorporation is the way that a business entity known as corporation is formally

organized and officially brought into existence. The process of incorporation involves

writing up a document known as the articles of incorporation and enumerating the firm’s

shareholders. In a corporation, the assests and cash flows of the business entity are kept

separate from those of the owners and investors which is called limited liability and

through incorporation, a company’s tax liability is also treated differently than that of a

sole proprietorship or partnership18.

Corporation is the best form of business organization because it gains the ability to share

ownership of the company by issuing shares of stock. Whereas a sole proprietorship or

partnership is usually owned by those operating the company, incorporating allows a

business owner to sell an ownership stake in part of the business. Corporations are

typically better at accommodating larger businesses and businesses with more owners 19.

They can also raise capital by selling shares. This gives more flexibility with adding

owners or changing stakeholders.

Though incorporation is more expensive and requires more time to handle administrative

manners, there are long-term, strategic advantages to it than running a sole proprietor or a

partnership.20

18
www.investopedia.com
19
Ibid.
20
It is worthy to note that a corporation can consist of just one person. S corps and C corps are popular options for
corporations with one or a small number of owners. A regular corporation can also be just one person.

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