Types of Entities

Good to Know:

The general business corporation (“C” Corp) is the most widely used type of corporation by both small and large businesses planning to have any number of shareholders. Directors are the individuals who, acting as a group known as the board of directors, manage the business and affairs of a corporation. Officers are the individuals appointed by the board of directors who are responsible for carrying out the board's policies and for making day-to-day decisions.

Need to Know:

Corporate existence depends on the State Corporation Laws; laws that impose requirements on how corporations are organized and maintained.

• Liability.The shareholders own the corporation, but their personal assets are protected from creditors. Shareholder liability is generally limited to the amount each has invested in the corporation.
• Stock distributions.Ownership of a corporation is determined by the issuance (sale) of stock to the shareholders. A corporation can raise money to run or expand the business through the sale or issuance of stock.
• Tax benefits. May be subject to double taxation