United States Essay, Research Paper
A corporation is a business chartered by a state or the federal government that enjoys limited liability and has unlimited life. It is a business organization owned by its stockholders. As compared to the proprietorship and partnership forms, the corporation offers the following advantages: limited liability, unlimited life, and the ease of transfer to a new owner. The greatest disadvantages of the corporation are that it is costly to organize and it may be subject to double taxation.
Stockholders in large corporations elect boards of directors to represent them in controlling the corporation. Stockholders have one vote for every share of stock they own.
Responsibility for day-to-day operation of large corporations is in the hands of the officersand their staffs. In this way, ownership is seperated from management in large corpoations.
There are three different types of corporations. A closed corporation is a corporation whose stock is not for sale to the general public. An open corporation is a corporation whose stock may be purchased by anyone. The S corporation is a special type of category of corporation that does not have to pay corporate income taxes.
The proprietorship is the most commonform of business in the United States. It is a business that is owned and run by one individual, the proprietor. Those who choose to organize their businessesas proprietorships do so for two reasons: the businesses are easy to set up and close down, and they provide certain freedoms for theri owners.
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