What is a corporation?
A corporation is a separate legal entity that exists under the authority granted by state law. A corporation has substantially all of the legal rights of an individual and is responsible for its own debts .It must also file income tax returns and pay taxes on income it derives from its operations. Typically, the owners or shareholders of a corporation are protected from the liabilities of the business. However, when a corporation is small, creditors often require personal guarantees of the principal owners before extending credit. The legal protection afforded the owners of a corporation can far outweigh the additional expense of starting and administering a corporation.
A corporation is a business entity formed by filing official documents with the appropriate state. Corporations are one of two types, C Corporations and S Corporations. A corporation is a standard corporation, called a C Corporation, unless and until the shareholders elect special “pass through” tax status with the Internal Revenue Service (IRS) by filing an IRS Form 2553. With the exception of a few special requirements, their tax status is the only difference between the two. A corporation is recognized by the law as an individual entity, separate from its shareholders (owners), and is many times treated as a human being. Its most important characteristic is the fact that shareholders, directors and officers enjoy limited liability for the debts, obligations and liabilities of the business as well as liability stemming from possible legal action. Protection of shareholders’ personal assets is one of the major reasons business owners choose to incorporate. Normally, shareholders canno
A corporation is a business entity considered to be a legal person that is distinct from the shareholders who own it. A corporation can borrow money, pay taxes, hire employees, sue or be sued, and can own property. The shareholders participate in the corporate profits through the payment of dividends.
