Question

Why is the corporation form of business the most dominate form over all others? Explain the advantage or disadvantage, as you see it, of a corporation over one of the other forms?

Answer 1

A corporate structure may be the best way to start a business as it is a separate entity. In fact, a company has all the civil rights of an individual, with the exception of voting rights and some other limitations. The state that issues its charter gives companies the right to exist. You have to apply for "qualifications" in the state in which you want to work if you come to the state to use liberal corporate laws to do business in a different state.

By filing incorporation articles with the relevant agency in your country, you can get your business involved. Usually, in any state, only one business can have a given name. When a shareholder is included, he will be given stock for cash or other assets in exchange for that interest. Shareholders elect a board of directors once a year, who meet anywhere from once a month to negotiate and manage corporate affairs.

Managers elect managers every year to conduct business regularly, including managers, secretaries, and treasurers. If managers agree, executives such as vice presidents may also be included. Letters, in addition to managers and shareholders, generally follow corporate bylaws governing the powers and authorizations of executives, officers, and shareholders.

Only small, private, qualified businesses such as legal or dental firms should follow the rules regulating a business. For example, on joining, the owners and a chief executive officer should be allocated. Where there is only one person in the company who is the primary shareholder in the company, who can choose himself and any other person whom he considers acceptable to the board of directors. If properly built, capitalized, and run, corporations will restrict their shareholders' liability (including applicable annual meetings with shareholders and directors). And if the company is not profitable or liable for losses in a suit, then equity assets are the most valuable thing a shareholder can lose. The financial qualities of a shareholder are not subject to corporate liabilities.

Advantages of Corporations:

• The owner's liability is limited: The assets are covered by the corporation's debts and liabilities. The shareholders are not responsible for the failure of any company.

• Raising capital is easy: The sale of stocks and bonds makes it easier to raise money. The number of investors for an enterprise can be infinite.

• Ownership is quick: Stock shares can be sold.

• Lifespan is eternal in corporations: The business remains after the founders' death

• Many costs can be exempt from taxation: Owners can receive tax-free benefits, such as pension and insurance deductions.

Disadvantages of Corporations:

• Taxation is double: It pays income tax, which requires shareholders to pay taxes on any dividends they earn and profits to be paid twice.
• Over-recording tax: Depending on the type of company, a large amount of documentation may be required for various forms of income and other taxes. S occupation, as noted above, is an exception to this scenario.
• Democratic management, autonomous management: When many investors have a strong controlling stake, the company's management team will run the company without the actual control of the owners.

Initially, the best investment is to launch a company as a sole proprietor. When the business grows, however, converting to a corporation gives the company the possibility to collect funds, acquire new shareholders, and preserve the personal property of the owners. Although the initial cost of building the company is high and involves a lot of paperwork, the corporate structure is a long-term benefit for shareholders.

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