The Corporate Business.

A corporation is an artificial entity created by filing Articles of Incorporation with the Secretary of State. This gives the corporation existence and a legal right to conduct business in the state of incorporation. Corporations are more complex than either a partnership or sole proprietorship and are subject to more regulation by the state.The internal rules of the corporation which outline the mechanics of the operation and management are called the by laws.
Corporate Structure. A Concise Explanatio.Shareholders. They own share in the business but do not engage in the direct management of the operation except by electing the directors of the corporation and by voting on major corporate issues.
Directors. They may be shareholders, but as Directors they do not own any of the business. As group known as the Board of Directors, they are jointly responsible for making the major business decision for the corporation as well as appointing the officers of the corporation.
Officers. they may be shareholders and or directors, but, as officers, they do not own any of the business. They are responsible for the day to day operations of the corporate business. Usual titles for the different corporate officers are. President, vice president, Secretary and treasurer.
• due to the organizational structure in a corporation, a certain degree of individual control is necessarily .lost by incorporation
• the technical formalities of corporation formation and operation must be strictly observed in order for a business to reap the benefits of corporate existence.
• the initial state fees that must be paid for registration of a corporation can be very high
• corporations are also subject to a greater level of governmental regulation than any other type of business entity.
• profits are subject to double taxation when distributed to shareholders in the form of dividends.
Advantages of Incorporation
• potential for limited liability is one of the most important advantages of the corporate form of business structure. The liability of corporate debt is generally limited to the amount of money each investor has invested.
• a corporation can theoretically have perpetual existence.
• a shareholder may freely sell, trade or give away his stock unless this right is formally restricted by corporate decision
• taxation can be both an advantage and a disadvantage.