used type of business organizational form is the corporation. Corporations
consist of shareholders, which are the owners of the business. A
board of directors, elected by the shareholders, manages the business.
One of the key advantages of the corporate form of business is that
the liability of its owners (shareholders) is limited to their investments.
Their personal estates are usually not liable for the obligations
of the corporation.
is a creature of statute. A corporation is an artificial being,
existing in law only and neither tangible or visible. Its existence
depends generally upon state law. It has its own corporate name
and is owned by individual shareholders. It is a legal entity with
rights and responsibilities. The corporation substitutes itself
for its shareholders in conducting corporate business and in incurring
liability, yet its authority to act and the liability for its actions
are separate and apart from the individuals who own it.
The classification of
a corporation normally depends upon its location, purpose, and ownership
characteristics. Some examples of classifications of corporations
- Domestic Corporation
- Foreign Corporation
- S Corporation
- Close Corporation
- Alien Corporation
- Public Corporation
- Private Corporation
- Nonprofit Corporation
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