A business owned by a group of people
Structure of a Corporation
Coca Cola is a large corporation that is known nation wide.
Apple is one of the smaller corporations, but is still very popular around the globe.
McDonald's is an extremely large corporation that every single person in this world has heard of.
Basic features of a Corporation
Close and Open Corporations
An open corporation (publicly owned corporation) is one that offers its shares of stock for public sale, unlike a closed corporation. One way an open corporation announces the sale of a stock is through a newspaper advertisement. An open corporation must also have a prospectus; a formal summary of the chief features of the business and its stock offering.
Formation of Corporations
Preparing the Certificate of Incorporation is the next step. Each state has its own laws for forming corporations. To incorporate a business, states need to file a certificate of incorporation with the necessary office. This certificate calls for basic information about the desired business. There is other important information within theses certificates. Naming the business; a business is required by law to have a business name that indicates clearly that a corporation has been formed. Stating the purpose of the business; a certificate of incorporation requires a corporation to describe its purpose clearly. Investing in the business; the certificate can not be completed until the business decides how to invest the partnership holdings into the corporation. Paying incorporation costs; usually a new corporation will pay an organization tax, based on the amount of capital of its stock. Also, the new corporation pays a filing fee before the charter will be issued.
The final step is operating the new corporation. The very first step to complete when getting the new corporation organized is to prepare a balance sheet/statement of financial position.