What is a Corporation?

A corporation is a term used in the US to mean a separate legal entity which a person can set up to run a business. In the UK the word company is sometimes used instead of corporation.

The shareholders of the corporation have limited liability in the event of failure of the business, but have a right to share in the profits by way of dividend payments.

The corporation is managed by a board of directors who are appointed by the shareholders.

In the US, there are various corporation types, a C corporation is a corporation which is is taxed separately from the owners, whereas an S corporation is generally not taxed separately

For further information see the Wikipedia corporation definition.

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Last modified March 10th, 2014 by Team

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