​WHAT ARE CORPORATIONS?

​Definition: A form of business operation that declares the business as a separate, legal entity guided by a group of officers known as the board of directors.

A corporate structure is perhaps the most advantageous way to start a business because the corporation exists as a separate entity..

​CORPORATION

• ​MUST BE REGISTERED AND OPERATE APART FROM ITS OWNERS

• ​TO RAISE MONEY OWNERS CAN SELL STOCK OR SHARES IN THE COMPANY

• ​THE COMPANY MUST HAVE A BOARD OF DIRECTORS WHO WILL GOVERN THE CORPORATION

RESEARCH TASK

​IN YOUR NOTEBOOK

​RESEARCH AND FIND:

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*4 ADVANTAGES OF A CORPORATION

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​*4 DISADVANTAGES OF A CORPORATION

​ADVANTAGES OF A CORPORATION

​* LIMITED LIABILITY - HOLDS A FIRMS OWNERS ARE RESPONSIBLE FOR NO MORE THAN THE CAPITAL THEY HAVE INVESTED.

​* ABILITY TO RAISE MONEY THROUGH STOCK.

​*BUSINESS CONTINUITY- CORPORATION DOES NOT END IF AN OWNER DIES.

​*EASY TO TRANSFER OWNERSHIP - BY SELLING YOUR STOCK

​DISADVANTAGES OF A CORPORATION

​*CORPORATIONS ARE SUBJECTED TO DOUBLE TAXATION. THEY PAY TAXES ON THEIR INCOME AND STOCKHOLDERS PAY TAXES ON PROFITS.

​*THE GOVERNEMENT REGULATES CORPORATIONS MORE THAN ANY OTHER TYPE OF BUSINESS.

​*CORPORATIONS ARE DIFFICULT AND COSTLY TO START WITH A COMPLEX PROCESS. THEY MUST FOLLOW EXTENSIVE RULES AND STANDARDS.

​*CORPORATIONS MUST DECLARE PUBLIC REPORTS WHICH ARE AVAILABLE TO COMPETITORS.