A corporation is a business owned by a group of people and authorized by the state in which is located to act as though it was a single person.

The structure of corporations

Corporations are towers on the business landscape. Corporations employ millions of people, have many layers of management, and provide consumers with many goods and services they use daily. Examples of a corporation would be Ford, Apple, and Walmart which are well known by most people.

A charter

A charter ( often called a certificate of incorporation) is the official document through which a state grants the power to operate as a corporation.

open and closed corporations

An open corporation is one that offers its shares of stock to public sale.The corporation must file a registration statement with the securities and exchange commission containing detail about the corporation and proposed issue of stock.

A closed corporation is one that does not offer its shares to the public. Just a few stockholders own it; some of them help run the business in the same manner that partners operate a business.

Forming a corporation

First, a series of management decisions need to be made about how the corporation would be organized. Second, the proper legal forms had to be prepared and sent to the state office that handled such matters. Third, the state would review the incorporation papers and issue a charter if it approved.

Sources of capital/ limited liability

-A corporation can obtain money from several different sources. One of the sources is the sale of shares to stockholders, because corporations are regulated closely people usually invest more willingly.

- The owners(stock holders), directors, and managers are not legally liable for the debts of the corporation beyond their investment in the stock shares purchased.

Government regulations and reports

To form a corporation, an application for a charter must be submitted to the appropriate state official, usually the secretary of state. Each state will probably require a corporation to obtain a license and pay a fee to do business in that state. Management must ensure that the corporation files special reports with the state from which it received its charter as well with other states. The federal government requires firms whose stock is publicly traded to publish financial data.