Benefits Of Forming A Corporation - 1101 Words

Corporation Student Name: Kerri Robinson Institution: Fitchburg State University One of the four types of firms is a corporation. A corporation is a legally defined, artificial being, separate from its owners. Corporations have as many legal powers that people have. For example corporations can enter contracts, acquire assets, and incur obligations. (Berk DeMarzo, 2014) Choosing the right business structure is very important. Different businesses offer different types of protection against legal action than others. This is why corporations often are popular. A corporation is viewed as its own entity and rarely can someone sue a corporation and go after personal assets of board members. Consider the following advantages†¦show more content†¦(Wolfe, 2016) After reading those great advantages to forming a corporation you should keep in mind that there are disadvantages as well. This section of the paper will review some of the big disadvantages to a corporation. Corporations can be an expensive start up. Often times there are many filing fees. On top of the filing fees, if your corporation is a nonprofit there are even more fees and paperwork to do. Depending on the state you’re in there may be more filling that needs to get done. This may not be a big deal to all but if you are limited on cash to start these fees will add up even if their small. Next corporations have many rules to follow. Corporations must follow certain standards by the law on how they govern themselves. For instance, it is required for a corporation to have a board of directors, hold meetings at determined intervals, and keep certain records. When a corporation sells stock or if they have a members other rules will apply as well. If your business is your idea and passion then you should consider the type of structure to form it as you don’t want to get left out. It is important to understand that one person cannot personally own the corporation. The board o f directors is dictated by federal and state rules. For instance oftentimes family members and spouses cannot serve on a small corporations board at the same time. Another important thing to understand is that even if you start aShow MoreRelatedAdvantages and Disadvantages of Forming a Business811 Words   |  4 Pages1. List down the advantages and disadvantages of forming a partnership * Collaboration. As compared to a sole proprietorship, which is essentially the same business form but with only one owner, a partnership offers the advantage of allowing the owners to draw on the resources and expertise of the co-partners. Running a business on your own, while simpler, can also be a constant struggle. 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