C-Corporation FAQs Back to All FAQs

What is a corporation?

A corporation is a type of legal entity that is separate and distinct from its owners, or shareholders. It is created through the process of incorporation, which involves filing certain legal documents with the appropriate government agency. Once incorporated, a corporation has many of the same rights and responsibilities as an individual, including the ability to own property, enter into contracts, sue and be sued, and pay taxes.

One of the key features of a corporation is limited liability. This means that the owners of the corporation (the shareholders) are not personally responsible for the debts and obligations of the corporation beyond the amount of their investment in the company. This makes it easier for corporations to raise capital from investors, as it reduces the risk for individual investors.

Corporations can take many different forms, including publicly traded and privately held companies, as well as partnerships and cooperatives. They are governed by a board of directors, which is elected by the shareholders, and are required to follow certain rules and regulations set out by the government in the jurisdiction in which they are incorporated.

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