Illustrate about corporation, Accounting Basics

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Q. Illustrate about corporation?

A corporation is an incorporated business under the laws of a state and owned by a few stockholders or thousands of stockholders. Approximately all large businesses and many small businesses are incorporated. The corporation is exclusive in that it is a separate legal business entity. The owners of the corporation are shareholders or stockholders. They purchase shares of stock which are units of ownership in the corporation. Must the corporation fail the owners would only lose the amount they paid for their stock. The corporate type of business protects the personal belongings of the owners from the creditors of the corporation. Stockholders don't directly manage the corporation. They select a board of directors to represent their interests. The board of directors choose the officers of the corporation such like the president and vice presidents who manage the corporation for the stockholders.


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