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What is Corporation?

Definition of Corporation

A business structure in which the company is seen as its own legal entity apart from its owners, and given rights and liabilities similar to those of a person. A corporation is able to buy and sell property, enter contracts, bring lawsuits, and must pay taxes. In the event of bankruptcy or a law suit the company, not the owners, are held liable. The major advantages of a corporation are that the personal liability of the owners is limited, and that the corporation can go on indefinitely. The main disadvantage is that money earned by the corporation is taxed twice: once when the company itself claims the income and again when the shareholders claim the income.
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