What Is a Corporation?
A corporation is a type of business entity created by filing articles of incorporation with the state. A corporation’s owners are known as shareholders, and a corporation also has officers and directors who run the business. As a legal entity, a corporation is considered separate from its shareholders, meaning shareholders aren’t personally responsible for debts of the corporation (liability for shareholders is limited to their investment in the business). Corporations are subject to a number of legal requirements and “corporate formalities” to which other types of businesses are not.
The terms “C-corp” and “S-corp” refer to tax classifications that are available to both corporations and limited liability companies (LLCs). Corporations are taxed as C-corps by default, but some corporations can elect S-corp taxation instead….
