CORPORATION

What is a Corporation?

A separate legal entity that is different from the owners is known as a corporation. A corporation is also known as a "legal person” as they enjoy the responsibilities and rights that are possessed by the individuals like borrowing money, entering in contracts, sue and get sued, owning assets, hiring employees, and paying taxes. A corporation can be said to be a body of persons who are authorized by the law to act as one person or entity and have the liabilities and rights distinct and different from the individuals who form the corporation. Corporations are found in various forms and are used to conduct businesses. The most important corporation is the one that is the registered company statute, or the common law.

POINTS TO REMEMBER

• A corporation is a separate entity that is legal and different from the owners. They enjoy the responsibilities and rights that the individuals possess.                                                      

• Limited liability is an important part of a corporation and it means that the    shareholders can take part in the profits of the corporation through stock appreciation and dividends.                                                                        

• Corporations are not personally liable for the company's debts.                 

• Corporations are not for profit always.

Understanding Corporations

All kinds of businesses use corporations. Its legal status varies from jurisdiction to jurisdiction, and the most important aspect of a corporation is a limited liability which means that the shareholders can take part in the profits utilizing stock appreciation or dividends but cannot be personally held liable for the debts of the company.

The Coca-Cola Company, Microsoft Corporation, and Toyota Motor Corporation are all corporations. Some corporations do business under the business names one such example is Alphabet Inc. which does business as Google.

The Creation of a Corporation

A corporation is formed when a business is incorporated by shareholders who have the ownership of the corporation. They are represented by holding common stock, to work upon their goals. The goals of a corporation may or may not be for-profit, as with charities. The majority of corporations provide a return to the shareholders. Shareholders are responsible for the payment of their shares to the treasury of the company upon issuance, as the owners of the corporation.

Becoming a Corporation

The process for forming a corporation varies according to the state you live and do business in. You need to file articles of incorporation with the state and issue stock to the shareholders of the company who elect the board of directors.

CONCLUSION

Theoretically and conceptually the corporations are immortal but if the corporation dissolves, they can ‘die’.