Caitlin O'Bryan

What are they?

Corporations have many layers of management and provide a lot of goods and services we all use everyday. They are few in number, but large in size. Bigger corporations include: Ford, Apple, and Walmart, but smaller corporations still certainly exist. They are nearly defined as businesses owned by a group of people and, in the court of law, act as if they were a single person or entity. A corporation can create contracts, borrow money, own property, and sue or be sued in its own name. Corporations are born by organizers procuring a charter. A charter is an official document that grants the power to operate as a corporation by the state.

Three Key Types of People

Close Corporations

This type of corporation is one that does not offer its shares of stock for public sale. Often times, in this kind of corporation, just a few stockholders own and operate the business similar to how partners run their business. Close corporations typically do not have to make their financial doings public knowledge. However, close corporations do have to make reports from the state they obtained their charter from as well as reports for tax purposes for all states that they operate in.
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Open Corporations

This type of corporation, unlike a close corporation, offers its shares of stock for public sale. This corporation form must file a registration statement entailing extensive details about the business and proposed issue of any stocks. This registration statement must then be shared with the SEC (Securities and Exchange Commision). A prospectus must also be given to each prospective buyer of new stock. A prospectus is a smaller version of the registration statement and is a formal summary of features of the business and its stock offering.