What is a corporation?

Most businesses start as a small company that owns one company or joint venture. The most common type of business when there are multiple owners is a corporation. A law firm sees itself as a real live person. Like an adult, a corporation is considered a clear and independent person with rights and responsibilities. “Birth Certificate” of a corporation is the legal form that the corporation has created or filed with the Secretary of State for incorporation. It should have a legal name, just like a person.

A corporation is separate from its owners. It is responsible for its own debt. If a corporation goes bankrupt, the bank cannot go after the shareholders.

A corporation is owned by individuals who invest money in a business. These ownership shares are listed in the share certificates, which state the name of the owner and how many shares there are. The corporation should keep a list or a list of how many shares each has. Since the owners of a corporation are the shareholders of the shares issued by the corporation, they are called shareholders. A unit of ownership is one unit of equity; The value of a share depends on the total number of shares issued by the business. The greater the number of IPOs, the smaller the proportion of the total shareholders each share represents.

Stocks come in different categories. Interested shareholders are promised a certain amount of cash dividends each year. The most common risk to common stockholders. If a corporation is in financial trouble, its liabilities must be paid first. If any money remains, the money goes to the preferred stockholders. Any money left over will be distributed to shareholders.