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Corporations
The
most common form of business organization, and one which is
chartered by a state and given many legal rights as an entity
separate from its owners. This form of business is characterized
by the limited liability of its owners, the issuance of shares
of easily transferable stock, and existence as a going concern.
The process of becoming a corporation, call incorporation,
gives the company separate legal standing from its owners
and protects those owners from being personally liable in
the event that the company is sued (a condition known as limited
liability). Incorporation also provides companies with a more
flexible way to manage their ownership structure. In addition,
there are different tax implications for corporations, although
these can be both advantageous and disadvantageous. In these
respects, corporations differ from sole proprietorships and
limited partnerships.
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