A corporation is a legal entity , having an existence separate and distinct from that of the owners. The owners of the corporation are called stockholders ( or shareholders), and their ownership is evidenced by transferable shares of capital stock. A corporation is more difficult and costly to form than other types of organizations .The corporation must obtain a charter from the state in which it is formed, and it must receive authorization from that state to issue shares of capital stock. The formation of a corporation usually requires the services of an attorney.
As a separate legal entity , a corporation may own property in its own name. The assets of a corporation belong to the corporation itself, not to the stockholders. A corporation has a legal status in court-it may sue and be sued as if it were a person. As a legal entity , a corporation may enter into contacts , is responsible for its own debts, and pays income taxes on its earning. On a daily basis , corporations are run by salaried professional managers , not by their stockholders, Thus the stockholders are primarily investors, rather than active participants in the business.
The tope level of a corporation management is the board of directors. These directors are elected by the stockholders and are responsible for the hiring the other professional managers. In addition , directors make major policy decisions.
As a separate legal entity , a corporation may own property in its own name. The assets of a corporation belong to the corporation itself, not to the stockholders. A corporation has a legal status in court-it may sue and be sued as if it were a person. As a legal entity , a corporation may enter into contacts , is responsible for its own debts, and pays income taxes on its earning. On a daily basis , corporations are run by salaried professional managers , not by their stockholders, Thus the stockholders are primarily investors, rather than active participants in the business.
The tope level of a corporation management is the board of directors. These directors are elected by the stockholders and are responsible for the hiring the other professional managers. In addition , directors make major policy decisions.
