Question

What are some characteristics of corporate

Answer 1

A Corporation is a legal entity distinct from it owners. Some of the characteristics of Corportion are:-

1. Limited liability :- The liability of shareholders is limited to the amount invested by them in the company. In case of   insolvency or inability of company to pay debts , personal assets of shareholders can   not be used as there liability is not unlimited.

2. Separate Legal entity:- The corporations is considered as separate legal entity. It can enter into contracts and can run business in its own name and not in name of shareholders or majority stakeholders

3. Unlimited Life:- Since corporation is a separate legal entity. Its life is not dependent of life of any shareholder or sale of stock by any shareholder.

4. Ease of transferring ownership:- a shareholder can transfer its ownership by selling his shares .He does not need any approval from any organisations

5. Ease of funds acquisition:- A corporation can raise interest free funds by selling stocks

6. Professional management:- They are not managed by shareholders but vote fro board of directs which hire professional managers