Skip to main content
Back

Characteristics of a Corporation definitions

Control buttons has been changed to "navigation" mode.
1/15
  • Corporation
    A separate legal entity from its owners, capable of owning assets, incurring liabilities, and existing independently of its shareholders.
  • Limited Liability
    Protection for owners, restricting their financial loss to the amount invested and shielding personal assets from corporate debts.
  • Unlimited Life
    Characteristic allowing continued existence regardless of changes in ownership or the death of shareholders.
  • Transferability of Ownership
    Ability for shares to be easily bought or sold without affecting the corporation’s operations or existence.
  • Double Taxation
    Situation where corporate earnings are taxed at both the corporate level and again when distributed as dividends to shareholders.
  • Government Regulation
    Legal oversight and rules imposed by authorities, often resulting in increased compliance requirements for corporations.
  • Separation of Ownership and Management
    Structure where shareholders own the company but delegate daily operations to professional managers.
  • State of Incorporation
    Jurisdiction whose laws govern a corporation, often chosen for favorable legal or tax environments.
  • Bylaws
    Internal rules and procedures adopted by a corporation to guide governance and resolve disputes.
  • Stockholder
    Individual or entity owning shares, granting rights such as voting, dividends, and participation in major decisions.
  • Board of Directors
    Elected group responsible for overseeing corporate policies, major decisions, and appointing executive management.
  • Chief Executive Officer
    Top executive responsible for implementing board policies and managing overall corporate operations.
  • Dividend
    Distribution of a portion of corporate earnings to shareholders, typically in cash or additional shares.
  • Preemptive Right
    Privilege allowing existing shareholders to maintain their ownership percentage by purchasing new shares before public offering.
  • Liquidation
    Process of dissolving a corporation, settling debts, and distributing remaining assets to shareholders.