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Corporations

Corporations. What is a corporation. Form of business ownership Considered a separate legal entity that is separate from the people who own and manage the business Viewed as a legal “person” for the purposes of taxes, contracts, lawsuits, etc. 3 Types of Corporations. C Corporation

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Corporations

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  1. Corporations

  2. What is a corporation • Form of business ownership • Considered a separate legal entity that is separate from the people who own and manage the business • Viewed as a legal “person” for the purposes of taxes, contracts, lawsuits, etc.

  3. 3 Types of Corporations • C Corporation • S Corporation • Limited Liability Corporation

  4. C Corporation (aka C Corp) • Owned by shareholders • No restrictions in who can be shareholder • Must elect a board of directors to make decisions and set policies • Business does not end when owners (shareholders) change or die • Limited Liability • Owners not responsible for company debts and can not be sued for corporate offenses • Double Taxation • Profits taxed at corporate level and dividends paid to shareholders are taxed

  5. S Corporation (aka S Corp) • Similar to a C Corporation with a few main differences. • May have no more than 100 shareholders • Shareholders can not be non resident aliens or other businesses • Limited Liability • Profits are passed through to shareholders; no double taxation • Shareholders must include income on their personal tax returns even if the money is not actually distributed

  6. Limited Liability Corporation(aka LLC) • Combines features of corporation and partnerships • Owners are called members • No restrictions on number of members in most states • Profits are passed through to shareholders; no double taxation • Not recognized by federal government and must file taxes as either a corporation, partnership, or sole proprietorship • Limited liability

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