The Advantages And Disadvantages Of Incorporating A Business



In order to mention all the advantages and disadvantages of
incorporating a business, first I should try to explain what a corporation is.
In 1819, Chief Justice Marshall of the United States Supreme court said: " A
corporation is an artificial being, invisible, intangible, and existing only in
contemplation of the law." In the Webster's College Dictionary corporation is
defined as "an association of individuals, created by law and having an
existence apart from that of its members as well as distinct and inherent powers
and liabilities." A corporation is divided into many units called shares of
stock. The owners of the stock are called stockholders or shareholders. One of
the ...

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they may suffer is limited to
the amount invested. Also, the creditors of the corporation can not go beyond
the assets of the corporation to satisfy their claims.
The stockholders or the shareholders are the ones who have control over
the management of a corporation's operation and activities. They are the ones
who elect the board of directors, and the board of directors are responsible to
the stockholders. Also, the board of directors are responsible for the
management of the day-to-day operation of the corporation. They also decide
when and how much of their income to give to the stockholders or shareholders.
Another characteristic that can be an advantage of incorporating a
business is that corporations may be organized for nonprofit organizations such
as colleges, hospitals, and others humanitarian purposes. However, most of the
corporations are organized to earn a profit for stockholders.
The biggest disadvantage of a corporation is that corporations are
subject to ...

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The Advantages And Disadvantages Of Incorporating A Business. (2003, December 30). Retrieved July 19, 2018, from http://www.essayworld.com/essays/The-Advantages-And-Disadvantages-Incorporating-Business/723
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"The Advantages And Disadvantages Of Incorporating A Business." Essayworld.com. December 30, 2003. Accessed July 19, 2018. http://www.essayworld.com/essays/The-Advantages-And-Disadvantages-Incorporating-Business/723.
"The Advantages And Disadvantages Of Incorporating A Business." Essayworld.com. December 30, 2003. Accessed July 19, 2018. http://www.essayworld.com/essays/The-Advantages-And-Disadvantages-Incorporating-Business/723.
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PAPER DETAILS
Added: 12/30/2003 11:31:02 PM
Category: Economics
Type: Premium Paper
Words: 449
Pages: 2

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