By: Calli Hamilton
The Structure of Corporations
Open and Close Corporations
A closed corporation is one that does not offer its shares of stock for public sale. Just a few stockholders own it; some of them may help run the business in the same manner that partners operate a business.
There are several factors involved in the preparing for the certificate of incorporation.
Each state has its own federal laws for forming corporations. No federal lay exists.
Usually a new corporation must pay an organization tax, based on the amount of its capital stock.
A corporation can obtain money from several sources. One of those sources is the sale of shares to stockholders.
Except in a few situations, directors, and managers are not legally liable for the debts of the corporation beyond their investment in the stock shares purchased.
The corporation is usually subject to more taxes than are imposed on the proprietorship and the partnership.
A corporation cannot do business wherever it pleases. to form a corporation, an application fur the charter must be submitted to the appropriate state official, usually the secretary of the state.