Corporations

Introduction

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A corporation is the most complicated form of business ownership. Although they are more complex, they provide safeguards that sole proprietorships and partnerships do not. Read this section to learn about the most common type of corporation: the C corporation. You will also learn important information about purchasing ownership in the form of stock in a publicly traded corporation.

A corporation (sometimes called a regular or C-corporation) differs from a sole proprietorship and a partnership because it's a legal entity that is entirely separate from the parties who own it. It can enter into binding contracts, buy and sell property, sue and be sued, be held responsible for its actions, and be taxed. As Figure 4.5 "Types of U.S. Businesses" shows, corporations account for 18 percent of all U.S. businesses but generate almost 82 percent of the revenues. Most large well-known businesses are corporations, but so are many of the smaller firms with which you do business.

Figure 4.5 Types of U.S. Businesses

Types of U.S. Businesses

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