What is a corporation?
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,” meaning that the corporation can enter into contracts, incur debts, and pay taxes apart from its owners. And there are other important characteristics that 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 are not personally responsible for the corporation’s debts; this is called limited liability.
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.
A corporation is a separate legal entity existing under authority granted by state law. It has its own identity separate and apart from its shareholders/owners. A corporation is capable of continuing indefinitely. Its existence is not affected by the death or incapacity of shareholders, directors, or officers of the corporation. Every state has laws governing companies incorporated in that state, and some have statutes pertaining to all corporations doing business within their boundaries. State law generally governs the process of incorporating. In addition, all states have “blue sky laws” which specifically cover securities offered by companies incorporated or doing business in the state.
A corporation is a legal entity separate from its owners, and may have an unlimited number of shareholders. A major advantage of any corporate form is that it limits the personal liability of the owners for claims against the corporation. Additionally, as a separate entity, a corporation has unlimited life, extending it beyond the life of its owners. Creation of a corporation occurs when properly completed articles of incorporation are filed with the appropriate state authority, and all fees are paid.
A corporation is a separate legal entity that exists independently from its owners. A corporation is created and comes into existence when articles of incorporation (charter or certificate of incorporation in certain states) are filed with the prescribed fees, and accepted by the proper state authority.
