What is a corporation?
A. What sets the corporation apart from all other types of businesses is that a corporation is an independent legal entity, separate from the people who own, control, and manage it. In other words, corporation and tax laws view the corporation as a legal “person” that can enter into contracts, incur debts, and pay taxes apart from its owners. Other important characteristics also result from the corporation’s separate existence: A corporation does not dissolve when its owners (shareholders) change or die, and the owners of a corporation have limited liability — that is, they are not personally responsible for the corporation’s debts. Q. What is a Limited Liability Company? A limited liability company, commonly called an “LLC,” is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. Like owners of partnerships or sole proprietorships, LLC owners report business profits or losses on their persona
A Corporation is an independent legal entity, separate from the individuals who own, control, and management it. That means a corporation does not dissolve when its owners (shareholders) change. Additionally, the owners have limited liability exposure because they are not generally held personally responsible for the corporation’s legal obligations and debts. Corporations require the filing of Articles of Incorporation in the states in which it operates, periodic meetings and recording of the proceedings (i.e., shareholder and board meetings), operating by-laws, and election of officers. There are two types of corporations: “C” and sub-chapter “S”. The “C” corporation pays taxes on business profits and its employees pay personal income taxes on their earnings. Additionally, “C” corporations can offer various kinds of stock such as preferred and common, voting and non-voting, and can even offer shares to other entity structures. The drawback of the corporate structure is the double taxa
