The Structure of Corporations

Information sourced from "Corporations" 10.3

Basic Features

A corporation is a business owned by a group of people and authorized by the state in which it is located to act as though it were a single person, separate from its owners. Corporations take up the largest portion of the business landscape and because of this they hold a very significant influence over our country and others. Corporate sales of goods and services are more than 20 times greater than sales from proprietorship's, and more than six times greater than sales from partnerships in the United States. Corporations are also seen among small businesses because of benefits they provide such as state backing and the stability created by an efficient management and regulations. A corporation is created by the laws of the state. They can make contracts, borrow money, own property, and sue or be sued in their own name.

The Formation of Corporations

The Benefits and Detriments of a Corporation

Sources of Capital: Corporations can obtain money from several sources, including stockholders, but people seem to more willingly invest into proprietorship's and partnerships rather than face the tight regulations of corporations.


Permanency of Existence: Corporations are more permanent than proprietorship's and partnerships. They can continue to operate indefinitely with little changes even when faced a withdrawal of a stockholder or a change in managers.


Taxation: Corporations are usually subject to more taxes than are imposed on the proprietorship's and partnerships. Some of these extra taxes come from filing fees, organization tax, state tax, federal income tax, and stock tax.