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Corporation Vershiela

A corporation is a legal entity distinct from its owners, capable of owning assets and conducting business. The incorporation process involves filing specific documents with the SEC, and while corporations offer advantages like limited liability and ease of ownership transfer, they also face disadvantages such as high formation costs and regulatory scrutiny. Additionally, corporations are subject to taxation on their income, requiring professional tax advice.

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Rubielyn Necio
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8 views2 pages

Corporation Vershiela

A corporation is a legal entity distinct from its owners, capable of owning assets and conducting business. The incorporation process involves filing specific documents with the SEC, and while corporations offer advantages like limited liability and ease of ownership transfer, they also face disadvantages such as high formation costs and regulatory scrutiny. Additionally, corporations are subject to taxation on their income, requiring professional tax advice.

Uploaded by

Rubielyn Necio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CORPORATION

Corporation is a legal entity created by law, separate from its owners. It can own assets, borrow
money, and engage in business activities without directly involving the owners.
Incorporation Process is initiated by filing articles of incorporation and other requirements with
the Securities and Exchange Commission (SEC), which includes details like the incorporators,
name of corporation, purpose of corporation, capital stock, and authorized share.
Advantages of a corporation are:
Limited Liability Shareholders are only liable to the extent of their investment in the
Corporation.
Unlimited Life Corporations continue to exist even after the death of the owners.
Ease of Transferring Ownership Shareholders can easily sell their ownership interest in most
corporations by selling their stock without affecting the legal form legal form if business
corporation.
Ability to Raise Capital Corporations can raise capital through the sale of securities such as
bonds to investors who are lending money to the corporation and equity securities such as
common stock to investors who are the owner.
Disadvantages of a corporation are:
Time and Cost of Formation Registration of public companies with the SEC can be time-
consuming and costly.
Regulation Corporations are subject to greater government regulations than other form of
business organizations. Shareholders can not just withdraw assets from the business. They can
only receive corporate assets when dividends are declared, and these amounts may be subject to
limits imposed by the law.
Taxes Corporations pay taxes on their income they have earned, The complexity of the subject
taxation and demands the advice of a qualified tax accountant.

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