Corporation

Corporation

Corporation means:
a legal entity, generally chartered by a state and separate and distinct from the persons who own it, giving rise to a jurist's remark that it has “neither a soul to damn nor a body to kick.” Nonetheless, it is regarded by the courts as an artificial person; it may own property, incur debts, sue, or be sued. For tax purposes it has four chief distinguishing features: (1) limited liability (owners can lose only what they invest); (2) easy transfer of ownership through the sale of shares of stock; (3) continuity of life; and (4) centralized management. Other factors helping to explain the popularity of the corporate form of organization are its ability to obtain capital through expanded ownership, and the share-holders' ability to profit from the growth of the business. Former IRC (check if this IRC provision is current here) §7701(a)(3).

U.S. and other Developed Countries International Tax Meaning

In technical terms, it means a legal entity generally chartered by a relevant government and separate and distinct from the persons who own it. However it is now commonly used as another way of referring to a company. (See: Company).

Description and Definition of Corporation

A type of business organization chartered by a state and given legal rights as a separate entity. Corporations are owned by shareholders and can own property, incur debts, and sue or be sued. Corporations are generally treated as separate taxpayers unless a Subchapter S election is made.

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