A Corporation is a business entity that is considered a legal entity, separate from its owners (called shareholders). It can make a profit and be taxed, as well as be held legally responsible. Corporations typically offer the strongest protection for their owners from personal liability, but they are also more expensive to set up and operate than other structures. They require more extensive record-keeping and operational processes and often need to file more reports with the government. In addition, profits are taxed at the corporate level and again when they are distributed to shareholders as dividends. This double taxation can add up to a substantial amount over time.

Corporations are chartered by the state in which they will be doing business, and they must file an “articles of incorporation” or equivalent document with that office to become a legal entity. These articles provide the basic guidelines for how the corporation will be run, including how meetings are called to order, how decisions are made, and how ownership is documented. Corporate bylaws can supplement the state laws in describing these and other aspects of how the corporation will be run.

A corporation is led by a board of directors. The directors are the people who make decisions for the corporation and ensure it follows the law. They are elected by the shareholders and are normally not involved in day-to-day operations. The board also has officers who carry out the daily tasks and responsibilities of the corporation.