Types of Corporations

In: Business and Management

Submitted By kiddcarver
Words 2286
Pages 10
There are many legal forms of businesses that can be selected when a new business is being established, or a previously established business is considering changing legal form. These legal forms of business each have innate advantages and disadvantages related to legal liability, taxes, continuity, and control. The legal forms of business include: sole proprietorship, general partnership, limited partnership, C-corporation, S-corporation, and Limited Liability Company. Other forms of business include: family limited partnership, professional partnership, professional corporation, and personal services corporation, but for the purposes of this document we will include only the most common and appropriate. We'll discuss the characteristics of each of these legal forms of business below.
Sole Proprietorship: Sole Proprietorship is the most common form of business in the United States. This is most likely due to the ease with which this form of business can be established. In the United States more than 17 million companies are operated under the form of sole proprietor, this equates to approximately 73 percent of all businesses in this country. Sole Proprietorship is an unincorporated form of business which can be established simply and with very few legal formalities. Local permits and licensing are all that would be required in order to establish a sole proprietorship, unless the business intended to operate under a name other than that of its owner. A sole proprietorship can be terminated just as easily as easily as it was established. There is no legal action required for the termination of a sole proprietorship, an owner would simply need to settle all outstanding obligations and contracts. Simplicity in establishing and terminating a business would be the most apparent advantage of selecting sole proprietorship as a legal form of business. While simplicity…...

Similar Documents

Corporation

...Corporations – Study Notes - A corporation is a legal entity that is separate and distinct from its owners - It has the rights and privileges of a person (exceptions: voting, hold public office, marry) - A corporation has the same duties and responsibilities as a person - It must respect the laws and pay income taxes - Corporations may be organized for the purpose of making a profit - Not-for-profit corporations are organized for cultural, social, charitable, medical, educational, and religious purposes - A publicly held corporation may have thousands of shareholders - Its shares are traded in an organized securities market such as the Toronto Stock Exchange - Most of the largest Canadian corporations are publicly held - A private corporation (closely held corporation) has only a few shareholders and does not offer its shares for sale to the general public - Crown corporation is similar to a privately held company except that it is owned by the government (Canada Post, GO Transit) Characteristics of a Corporation Separate Legal Existence - The corporation acrs under its own name rather than in the name of its shareholders - Corporation can buy, own and sell property. They can borrow money and enter into legally binding contracts in its own name. May sue or be sued and pays its own income tax. - The acts of the owners (shareholders) do not bind a corporation unless these owners are duly appointed agents of the corporation Limited Liability of......

Words: 293 - Pages: 2

Type 1 and Type 2 Error

...Type I error (or, error of the first kind) and Type II error (or, error of the second kind) are precise technical terms used in statistics to describe particular flaws in a testing process, where a truenull hypothesis was incorrectly rejected (Type I error) or where one fails to reject a false null hypothesis (Type II error). The terms are also used in a more general way by social scientists and others to refer to flaws in reasoning. This article is specifically devoted to the statistical meanings of those terms and the technical issues of the statistical errors that those terms describe. Statistical test theory In statistical test theory the notion of statistical error is an integral part of hypothesis testing. The test requires an unambiguous statement of a null hypothesis, which usually corresponds to a default "state of nature", for example "this person is healthy", "this accused is not guilty" or "this product is not broken". An alternative hypothesis is the negation of null hypothesis, for example, "this person is not healthy", "this accused is guilty" or "this product is broken". The result of the test may be negative, relative to null hypothesis (not healthy, guilty, broken) or positive (healthy, not guilty, not broken). If the result of the test corresponds with reality, then a correct decision has been made. However, if the result of the test does not correspond with reality, then an error has occurred. Due to the statistical nature of a test, the result is......

Words: 1375 - Pages: 6

Corporation

...CORPORATION * A Corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. Attributes of a Corporation * A Corporation is an artificial being with a personality separate and apart from its individual shareholders or members. * It is created by operation of law. * It enjoys the right of succession. * It has the powers, attributes and properties expressly authorized by law or incident to its existence. Advantages of a Corporation * The corporation has the legal capacity to act as a legal entity * Shareholders have limited liability. * Its management is centralized in the board of directors * It has continuity of existence. * Greater ability to acquire funds. Disadvantages of a Corporation * A Corporation is relatively complicated in formation in management. * There is a greater degree of government control and supervision. * Its requires a relatively high cost of formation and operation * It is subject to heavier taxation than others forms of business organizations. * Transferability of shares permits the uniting of incompatible and conflicting elements in one venture Classes of Corporations * Stock Corporation Corporations which have share capital divided into shares and are authorized to distribute to the holders of such shares dividends or allotments of the......

Words: 451 - Pages: 2

The Corporation

...The Corporation: The Corporation is today's dominant institution, creating great wealth but also great harm. This 26 award-winning documentary examines the nature, evolution, impacts and future of the modern business corporation and the increasing role it plays in society and our everyday lives. The birth of the corporation: How the corporation came to be. Originally, corporations were set up to serve the public good. Corporation lawyers gained rights through the US Supreme Court using the 14th Amendment (set up to protect slaves) that gives them the rights of a person. In the last century, the corporation is given more and more rights while people are increasingly stripped of theirs. Origins of Corporations Although definitions and descriptions of corporations have changed dramatically through the last few hundred years, the first corporation actually began long ago – as early as the sixteenth century. It was a benchmark in the history of money and business, transforming an economy from what was essentially a debt economy (when it came to merchant work) to a state-sponsored enterprise. This type of business was brilliant and revolutionary for the early business world, allowing businesses to take risks and expand in ways they had been unable to do before. The concept spread and grew, and by the seventeenth century, the corporation was well on its way to being an acclaimed and established center for regular commerce. When corporate business came to the newly born......

Words: 2045 - Pages: 9

Type

...The 21st century has seen the rise of mobile applications through the technology of smart phones .The mobile apps market is very elastic and continues to expand each and every day. The mobile market has a wide variety of applications that no matter what type of interests you may have, there is something for you. Outlined further in this report will outline the demand for these apps, trend analysis, current market status, success stories and lastly the end users. It was in June of 2008 when Apple Inc released its 3G Apple Iphone which featured support for third party applications. Then only a short month later the Apple app store was created. This took consumers by storm and in the first weekend over 10 million apps were downloaded. Since its release the app store has continued to expand with more apps and better quality apps that now range from E-books to a very humorous fart app. Shortly after Apple had seen rapid success with its app store, other leading Telephone providers like blackberry, Nokia and Android soon released a similar app store for their users. The evolution of mobile apps seems to be creating applications in which ease day to day living through our smart phones. For example in the Apple app store, there are apps which allow you to receive newspapers like the New York Times, or the Globe and Mail directly to your mobile device. There are also apps which act as a PDF creator, it allows for the consumer to take pictures of multiple documents, upload them......

Words: 348 - Pages: 2

The Corporation

...the corporation is very informative. There are several viewpoints throughout the documentary. In one part of the documentary certain corporations were call bad apples. Bad apples were the corporations that were flooding the corporation industry. Kmart in Enron were two of the corporations thar was considers bad apples. The documentary a corporation was said to be like a family. Asia K. Philson Everyone works together for a common in goal like a family would do. One important key factor is that certain corporations are exposing dangerous chemicals that harm us. Some believers feel we are in a major cancer epidemic due to harsh chemicals that one is exposed to on an everyday basis. The synthetic chemicals are not only causing cancers but birth defects and other toxic mishaps as well. Animals are born with defects and a child was born without eyes. The documentary explains that a corporation is psychotic If you're looking at the corporation as a person. The corporation is said to have all the characteristics of a psychopath. The people that are part of the corporation such as stockholders, workers, and Executives all have moral responsibility within a corporation. The CEO of Goodyear says that his job is very stressful and that he does not have complete control (Sam g) Since 1990 Goodyear has laid off over 20,000 employees and closed 8 plants. He explains that it's a decision that he never likes to make. Society views CEOs and other important people of corporations......

Words: 313 - Pages: 2

Developing B2B and B2C Types of E-Commerce at Midea Corporation

...Course Project Developing B2B and B2C types of e-commerce at Midea Corporation Abstract This project discusses that what e-commerce can do to help Midea gain more profit or reduce the spending. In China, most of the IT technologies that customers use are at the initial stage. The development of the Internet is just at the beginning. Therefore, customers can’t make an order for what they want only by viewing the company’s homepage. As the leader in the area of Chinese household appliances, Midea should play a leading role to run the e-commerce which is good for running the business. This project says that how Midea finds out its problem and deal with it by e-commerce. Brief Company background Midea which produces the home appliance, mainly involved in the field of logistics and other large-scale comprehensive modernized enterprise was established in 1968. What is more, it has four industry groups, therefore it is China's largest home appliance production base and export bases. In 1980, Midea officially entered the home appliance industry. Currently, there are 130,000 employees are hired by Midea. Looking to the future, Midea will continue to adhere to the effective, harmonious, scientific policy of development, in order to form the industrial diversification, the development of large-scale, business specialization, regional operations and management of differentiated of industrial pattern. Moreover, it strives to establish a healthy financial structure and......

Words: 1169 - Pages: 5

Corporation

...Partnership or Corporation 1. What are some of the advantages and disadvantages of Thomas and Bryan forming a corporation? First of all, a corporation is a legal entity, created by the state, whos assets and liabilities are separate from its owners. It has some rights, duties, and powers of a person, as well as the rights to receive, own or transfer property. It is also important to mention that corporations are typically owned by many individuals and organizations who shares of the business, called stock. After this, I found some advantages or disadvantages for Thomas and Bryan if they want to form a corporation. Disadvantages: First of all, they will not be able to form a corporation in any State of the U.S. According to the law, there are some states in the U.S. that do not allow corporations owned by only two individuals. Information play an important role in any corporation, it takes a long time, as well as a lot of money to make annual reports with financial information of the office theys want to put, the flowers, and all that stuff, that is probably going to take a good part of the $10,000 of their initial contribution. Fees and formality will be some other disadvantages of turning the business into a corporation, considering that the Capital contributed was not a big amount. Finally, we cannot forget that corporations have potential double tax consequences (once when the company makes its profit, and a second time when dividends are paid to shareholders),...

Words: 834 - Pages: 4

Business Types

...and operated by one individual. This type of business organization is relatively inexpensive to start. The pros of the sole proprietorship are easy to start, the owner is able to retain his profits and the owner has sole control of business decisions. The cons of sole proprietorships are unlimited liability, limited financial resources, harder to get additional financial resources for example loans, limited growth, and limited life span. 1) The owner/operator is solely liable for the business and if the business is sued, the owner is liable for any and all judgments rendered. The owners personal assets are not protected. 2) The owner/operator reports the income taxes on their personal tax form. The owner is able to deduct business expenses. 3) The longevity of a sole proprietorship is not guaranteed. If no arrangements are made to continue business, business will not continue upon the death of the owner. “Sole Proprietorships are terminated upon the death of the proprietor. Until the business is assumed by a new owner the business remains a part of the deceased proprietor’s person’s estate.” (Bartschi, 2001, pg 21) 4) The owner/operator has total control over all the decisions that need to be made in regards to the business. 5) The owner/operator retains all profits. 6) If the owner or operator chooses to relocate his business, all he will need to do in the new location is fill out a new DBA (How to Move Your Business,LLC or Corporation to Another State,......

Words: 1535 - Pages: 7

C Corporations and S Corporations

...business). This system applies to the business S-corporation-called the "C-corporation" (C-corp) for reasons we'll see shortly-and the system of taxing first the corporation and then its owners is called the "corporate double tax." "Pass through" taxation. The entity (called a "flow-through" entity) is not taxed but its owners are each taxed (more or less) on their proportionate shares of the entity's income. The leading forms of pass through entity (further explained below) are: Partnerships, of various types. "S-corporations" (S-corps), as distinguished from C-corps. Limited liability companies (LLCs). A sole proprietorship such as John Doe Plumbing or Marcus Welby, M.D. is also considered a pass through entity even though no "organization" may be involved. The first major consideration (in this case, a tax consideration) in choosing the form of doing business is whether to choose an entity (such as a C-corp) that has two levels of tax on income or a pass through entity that has only one level (directly on the owners). Losses are directly deductible by pass through owners while C-corp losses are deducted only against profits (past or future) and don't pass through to owners. The major business consideration (as opposed to tax consideration) in choosing the form of business is limitation of liability, that is, to protect your assets from the claims of business creditors. State law grants limitation of liability to corporations (C and S-corps), LLCs, and partners in certain......

Words: 3563 - Pages: 15

Corporations

...Introduction A corporation is a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter (i.e. by an ad hoc act passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration. An important (but not universal) contemporary feature of a corporation is limited liability. If a corporation fails, shareholders normally only stand to lose their investment and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation's creditors. Sole- Proprietorship A business structure in which an individual and his/her company is considered a single entity for tax and liability purposes. A sole proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but he/she reports business income or losses on his/her individual income tax return. The owner is inseparable from the sole proprietorship, so he/she is liable for any business debts also called proprietorship. A business can be set up in a variety of ways, ranging from a sole-proprietorship to a general partnership, an LLC to a......

Words: 1593 - Pages: 7

Type

...in themselves. In less balanced individuals, such mitigation of the unseemly eventually undermines the ENFJ's integrity and frequently their good name. In healthier individuals, deft use of this awareness of the inner needs and desires of others enables this astute type to win friends, influence people, and avoid compromising entanglements. The dynamic nature of their intuition moves ENFJs from one project to another with the assurance that the next one will be perfect, or much more nearly so than the last. ENFJs are continually looking for newer and better solutions to benefit their extensive family, staff, or organization. Extraverted Sensing Sensing is extraverted. ENFJs can manage details, particularly those necessary to implement the prevailing vision. These data have, however, a magical flexible quality. Something to be bought can be had for a song; the same something is invaluable when it's time to sell. (We are not certain, but we suspect that such is the influence of the primary function.) This wavering of sensory perception is made possible by the weaker and less mature status with which the tertiary is endowed. Introverted Thinking Introverted Thinking is least apparent and most enigmatic in this type. In fact, it often appears only when summoned by Feeling. At times only in jest, but in earnest if need be, Thinking entertains as logical only those conclusions which support Feeling's values. Other scenarios can be shown invalid or at best significantly......

Words: 736 - Pages: 3

The Corporation

...qualities, analysis of growth and history, exploration of impacts, and brief look at the future of the modern business corporation. The documentary defines a corporation as a legal person, explaining that is has most of the legal rights a person has such as borrowing money and managing property. The film was released around the time of major corporate scandals, such as Xerox, Enron, and WorldCom, and uses the metaphor “bad apples” to state that there are more than a few corporations that are bad. The film argues that if corporations were people, they would have psychopathic personalities. It then states that corporations have become a vessel which good and bad people can cause harm to society because of the way corporations have evolved and how they are protected. The Corporation film is concerned with the role corporations have in modern society its impact, or the corporate social responsibility. The film explores how corporations have been poisoning the earth as well as consumer minds and how the government is intended to look over and control these corporations. It looks into some of the unethical business practices and strategies executed by corporations and the externalities that are created to satisfy the main goal of the corporation: to maximize profit and market share. 2. Body A major social issue that was brought up in this film is the way that corporations treat foreign factory workers. The film is concerned with the rampant use of sweatshops by large......

Words: 913 - Pages: 4

Type a and B Personality Types

...Type A and B Personality Types Mariana Puche Los Angeles Southwest College Health 11- Principles of Healthful Living Priscilla Watkins March 4, 2012 While conducting research on stress related heart disease, Cardiologists Friedman and Rosenman acknowledged two basic personality types, Type A personality and Type B personality. Type A personality is described as “being extremely competitive, achievement oriented, hostile, aggressive, and as exhibiting a sense of urgency” (Goethals, 2004, p.1189). People with type A personalities often come off as aggressive because of their mannerisms and their competitiveness. They are loud and quick in their speech, they are very rigid, and they judge themselves very harshly. They seek to always be engaged and stimulated and are often perfectionists. They are very different than Type B personalities. Type B personalities are “characterized by a more calm and even-tempered demeanor… Type B individuals show more muscle relaxation and lower levels of activity and alertness” (Darity, 2008, p.224). Type Bs are less angry and aggressive and more tolerant and understanding of others. They also tend to be less stressed which equates to them having lower incidence of Coronary Heart Disease. I would classify myself as a Type A personality. I am ambitious, competitive, and a perfectionist. My ambition is a positive stressor because it fuels me to work my hardest, Reference Darity, W. (2008) Personality, Type A/ Type B. In......

Words: 316 - Pages: 2

Types of Businesses

...Owning and operating a business, for some, is a dream come true, and something that takes years of careful planning before it can be brought to fruition. However, deciding which type of business format to enter into is just as important as coming up with a solid business plan initially. Thorough consideration should be given to all business types; even discussing the many options with an expert is highly advisable. In the end one has to make the final decision to become a sole proprietorship, an LLP, LLC, an S corporation, so on and so forth… One of the simplest forms of running a business is doing it as a sole proprietor. A photographer, for example, doesn’t need much capital to start up this venture, and would have the benefit of being his or her own boss, as well as reaping all of the profits made from selling his pictures. Plus, this person would not have to pay taxes at a business level, and would only have to file a 1040 on the personal income tax form. One of the only downsides to this type of business is the photographer must be prepared to be solely liable for any damages or torts brought forth upon them. Additionally, a sole proprietorship has a limited life, because when the business owner dies, the business generally dies along with it (Garrison, 2012). Another very common form of doing business in the United States is by establishing it as a partnership. This can be as simple as two friends joining together to form a catering company, or as complex as......

Words: 1074 - Pages: 5