What is Corporation? And types of Corporation?

 A corporation is an organization usually a group of people or a company authorized by the state to act as a single entity and recognized as such in law for certain purposes.

corporation is a business entity that is registered with the Govt and that has its own legal identity.



a corporation can be created by a single shareholders or by multiple shareholders who come together to pursue a common goal it can be formed as a "for - profit entity" or a "not for - profit entity"

For-profit entities form the majority of corporations, and they are formed to generate revenues and provide a return to their shareholders, according to their percentage of ownership in the corporation.

Not-for-profit entities operate under the category of charitable organizations, which are dedicated to a particular social cause such as educational, religious, scientific, or research purposes. Rather than distribute revenues to shareholders, not-for-profit organizations use their revenues to further their objectives

Types of business corporation

  • C corporation : It is the most common form of corporate entity .It is also known as a "General for profit corporation". It is owned by Shareholders  the Shareholders elect a Board of directors to create and direct the policies of the business

  • S corporation : S corporation is formed in the same way that a C corporation is formed the incorporator files article of incorporation with the state office.

  • Non profit corporation : For those groups that are formed for charitable, educational, religious, literary, or scientific purposes, and not for the purpose of generating profits for its shareholders, a special legal entity may be formed under Section 501(c)(3) of the Internal Revenue Code. 

  • Limited Liability Companies (LLC) : A limited liability company (LLC), also known as a limited liability corporation, is a business entity that prioritizes the separation of the people in the business and their personal liability. Similar to other corporation types on this list, an LLC protects members from being financially responsible for damages. More specifically, an LLC protects the personal assets of the owners in the event of a lawsuit or any kind of financial damages.

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