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Corporaion

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Submitted By choc
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Corporation is an entity that is chartered by a state in that it is incorporated. Starting a corporation requires a start-up cost. A corporation is separate from the people who own it which means that the corporation can sue someone and be sued by someone. A corporation can be created with profit or not profit purposes. A corporation can be sued, taxed, and enter in an agreement which is contractual. Those who own the corporation are considered to be the shareholders.
Advantages of a Corporation
• Corporation shareholders have limited liability for the amount of debt or judgments in which the corporation may consume.
• Shareholders of the corporation are liable for the stock in which they invest into the company
• Funds can be raise through the sale of the company’s stock
Disadvantage of a Corporation
• Incorporating cost more and requires additional time as oppose to the other organizational forms
• Federal and state agencies monitor a corporation
• Government rules and regulations such as the Sarbanes-Oxley Act of 2002
• Higher taxes
• Shareholders dividends are not deducted from the income of the business, which may result in the shareholder being taxed twice.
An example of a business in which it is considered a corporation is Wal-Mart. Wal-Mart is a corporation because it has limited liability, which means that any debts that Wal-Mart may incur these debts are not the responsibility of the shareholders.
References
Arkansas Small Business and Technology Development Center. (2011). Choosing legal forms of ownership for your business. Retrieved October 6, 2011 from

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