The Corporation. Section 8-2. What is a corporation?. A corporation is a business organization that operates as a legal entity that is separate from its owners and is treated by law as if it were an individual person. Can sue or be sued 20 % of all business are corporations.
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A corporation is a business organization that operates as a legal entity that is separate from its owners and is treated by law as if it were an individual person.
Can sue or be sued
20 % of all business are corporations
File an application with the state (articles of incorporation)
Write a set of corporate bylaws (rules by which a corporation will operate)
After application is approved, a corporate charter is issued (license to operate)
Closely Held Corporations-onewhose shares are owned by a relatively small group of people (maybe 3 or 4)
Publicly Held Corporations- one that sells its shares openly in the stock market where anyone can buy them
Going Public- when a closely held corporation decides to sell its stock in the stock market
Ability to raise capital- sell more stock
Limited liability- owners won’t lose a lot of their own money
Separation of ownership and management
Complex and expensive set-up
Slow decision making process
Not a form of business ownership
A franchise is a contractual agreement to sell a company’s products or serviced in a designated geographic area
McDonald’s, Subway, Taco Bell, Red Lobster
Choose the one that best fits your need.
Often, corporations start out as a sole proprietorship or partnership.