What Is a C Corporation?
A C corporation is one of the terms used to refer to a profit corporation or simply, corporation—they are all one and the same thing. A corporation is a separate legal entity, distinct from its owners, and generally may exercise the same rights and privileges as a natural person. It may engage in legal battles, contracts, joint ventures with other legal entities, the sale, transfer or purchase of assets, among others.
Since the corporation can incur debt and enter into agreements on its own behalf, the owners of a corporation, also known as shareholders, are not personally liable for the debts and obligations of the corporation, subject to a few exceptions. Thus, the liability of the owners for corporate losses is limited to the amount of their investment.
The management of a profit corporation is centralized in the board of directors. The structure of a corporation is as follows, it is owned by its Shareholders, managed by a board of directors, and the day to day activities are handled by the corporation’s President and other officers. The duties and obligations of the shareholders, directors, or officers to the corporation and to each other may also be regulated by the Corporation’s bylaws or shareholder agreements.
A corporation has perpetual existence and continues unaffected by changes in ownership or management.
|Advantages in a nutshell:|
|1. Separate Legal Entity|
|2. Limited Liability|
|3. Continuity of Existence|
|4. Transferability of Ownership|
|5. Centralized Management|