The main strategic aim and objective fo

Topics: Corporation, Legal entities, Stock Pages: 6 (1006 words) Published: December 7, 2014
The main strategic aim and objective for the nearest period is a dynamic development of the Bank and achievement of a qualitatively new level with the standards of the Basel Committee on Banking Supervision. The development strategy of the Bank is based on the components, which together will ensure strengthen of the financial and economic situation of the Bank and the preservation of its credibility with its customers. Main strategic aims of Joint Stock Commercial Bank «APABANK» (Closed Joint Stock Company) are: 1. Increase of authorized capital, raising size of own capital. 2. Expansion of activity of the Bank by obtaining a License providing right to carry out transactions in foreign currencies and further entry into the deposit insurance system. 3. Constant expansion of customer base with a priority on attracting small and micro-businesses. 4. Formation of a diversified and sustainable resource base. 5. Commencement and active development of cooperation with financial institutions and mortgage systems. 6. The increase in capitalization of the Bank.

7. The introduction of international standards of banking operations.  8. The introduction and development of modern methods of marketing and PR. 9. Improvement of risk management system.
10. Improving the quality and diversity of the range of services for individuals, small and medium-sized businesses, in raising the volume of transactions and the pursuit of cost reduction of managing business, increasing its level of technology and control.             Final result should be the creation of modern technologically Bank, which will possess by an optimal required network of service centers, provide high quality services to clients and enjoy significant authority in the market. Following are the advantages of Joint Stock Company:

1. Limited Liability : Liability of members of Joint Stock Company is limited to the extent of shares held by them. Hence shareholders assets will not be on stake. This feature attracts large number of investors to invest in the company.

2. Perpetual Existence : A company is an artificial legal person created by law which has its own independent legal status. Its existence is not affected by the death or insolvency of its members.

3. Large Scale Operation : The capacity of the corporate organizations to raise the funds is comparatively high which provide capital for large scale operations. Hence opens the scope for expansion.

4. Transferability of Shares : In a joint stock company it is easy to transfer shares to anyone. But the same is not permitted to private limited company.

5. Raising of Funds : It is easy to raise a large amount of funds as the number of persons contributing to the capital are more.

6. Social Benefit : It offers employment to a large number of people. It facilitates promotion of various ancillary industries. It also donates money for education, community service.

7. Research and Development : It invests a lot of money on research and development for improved production process, improving quality of product, designing and innovating new products etc.

Disadvantages of Joint Stock Company:

1. Formation is not easy : To act as a legal entity a company has to fulfill various legal and procedural formalities making it a complicated process.

2. Double Taxation : This is the biggest disadvantage which the company faces. Firstly, company needs to pay tax for the earned profits and again the shareholders are taxed for the earned income.

3. Control by Board of Directors : After electing directors of the company which manage the business for the company the shareholders become ignorant of their responsibilities. This may be due to lack of interest and lack of proper and timely information.

4. Excessive Government Control : A company has to comply with provisions of several acts, non-compliance of which can cause a company heavy penalty. This affects the smooth functioning of a company....
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