Corporation short form is corp. In the case of plural words add ‘s’ at the end like corporations short form is corps.
What is Corporation?
A corporation or incorporation is a form of organization that becomes a legal entity. It’s an organization that operates as such and has the same rights and responsibilities as a natural person. Although it does not have to be registered, can exist just by common law.
Types of Corporation
There are three different types of corporations: public, private, and non-profit.
Public corporations are owned by the state and maybe established for any legal purpose.
Private corporations are establishments that use the capital raised from investors who expect a return on their investment, whereas a non-profit corporation is privately owned but does not distribute profits to shareholders or owners. Therefore no taxable income is distributed to private individuals.
There are two types of stock corporations: ordinary and preferred. In the first case, profits must be distributed to all shareholders regardless of their initial investment while in the second case, a fixed rate is paid at a predetermined time regardless of the corporation’s profits. The latter type is usually used by non-profit organizations.
In general, a corporation has limited liability, meaning that the corporation’s owners are not tried because of actions taken by the business. The exception to limited liability is in cases where several people have acted together for a wrongful act for which they are charged with negligence or intentional misconduct, meaning that they failed to exercise appropriate care.
Structure of Corporation
A corporation has two types of internal structure: an unincorporated company and a corporation incorporated.
An unincorporated company is an organization of several persons who agree to share responsibility and property according to their interest or by participation in the business. A private or limited liability company is a small business group with limited funds and only one owner, but it has unlimited power to bind its members both individually and as a company.
A corporation can also be called an institution that has limited liability, is composed of shareholders, and must register its articles of incorporation with the state in which it does business as a legal entity. These articles include the name of the issuer, type of organization, capital stock, number of shares authorized for issuance, and their par value or face value.
In addition, it is necessary to determine the relationship between shareholders and directors, define the responsibilities of each one and include a list of bylaws that must be respected. In other words, they are conditions that must be accepted by all members involved in order to create an organization with a legal personality that can take part in commercial activities.