what is a corporation

Question

A company with an idea for business that sells the rights to use it brand name and product
a business own and operated by one person and the most common form of business
a legal enitity distinct from its owners or shareholders
a business that has fewer that 500 employees and that is taxed at a lower rate

Answer 1

A corporation is a legal entity that is distinct from its owners or shareholders. It is created by the process of incorporation, which grants the corporation certain rights and privileges. It is owned by shareholders who invest in the company by purchasing shares of stock. The shareholders elect a board of directors to oversee the company's operations and make important business decisions. Corporations enjoy limited liability, meaning the personal assets of shareholders are generally protected from the corporation's debts and obligations. They can issue stock, borrow money, and enter into contracts, and they exist indefinitely, even if the owners change. Additionally, corporations have the ability to sell the rights to use their brand name and product, but this is not the sole defining characteristic of a corporation.