What Is Corporation?

Corporation is an association of individuals, which has the right to carry on business in its own name, to own property, and to incur debts. People who want to form a corporation require a charter or articles of incorporation. This is state-issued document, which legally recognizes the existence of a new corporation.
The character includes the legal name and the present address of the corporation. It describes the purpose to create the corporation such as charitable, educational, governmental, and so forth. The character also states detailed information on the maximum amounts and types of stock that corporation issue, provision for length of time the corporation is allowed to exist, the adoption of by laws and other administrative matters.
People who own corporation may be a small group like a local land development company with your owners, or they may be very large like the millions of people who own share the General Motors Corporation or International Business Machine. To raise large amount of capital, the corporation issue stock certificate, which are written evidence of the owners investment and risk and divide any profits that are made.
A corporation has certain right granted by law. It may own and sell property, borrow money, manage its own debts. Individual owners are not responsible except to the extent that they have invested money in corporation. Their personal assets cannot be seized to pay the debts of a corporation. Owners, thus, have limited liability.

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