Many of the most prominent names in business are organized under the business structure known as a corporation. A corporation, aside from being a means of organizing a business, is a way of structuring a company in a way that gives it many of the legal rights of a real person. A corporation can be made of a single person or of a group of people. Corporations that are made up of a single person are known as “sole corporations” while those made up of a group of people are known as “aggregate corporations.”
In the eyes of the laws of the United States, a corporation exists as a factual person. As such, the structure of a corporation provides protection to the actual people involved in the corporation itself. The limits on the liability of the individuals running a corporation or comprising one are some of the greatest benefits of a corporation. As such, the protections serve as a huge benefit for smaller businesses and organizations to incorporate. The incentives are greatest for those individuals involved in a trade that is subject to a lot of litigation, like medicine.
In the United States, each state is allowed to create rules and requirements for any business that wants to incorporate. Once the corporation incorporates under the statutes of a state, it is seen as being a citizen of that state. Overall, corporations are incorporated in a specific nation. Once incorporated, any company is seen as being governed by the laws of incorporation of the state in which it “resides,” much like people are subject to the laws of the states in which they reside.
Some of the greatest areas of regulation include the ability of a corporation to raise funds for its support. One way to raise funds for investment and expansion is through the issuance of stock. The stock may be issued privately or publicly. Once stock is issued, a corporation is governed by its shareholders through either direct or indirect means. Larger corporations with many shareholders may opt to have a board of directors run the corporation under their guidance, like a republican form of government. This board is expected to serve the best interests of the company and makes all of the major decisions for the corporation.
Another option for a corporation is to be a non-stock corporation. This means that the corporation does not issue stock to individuals. This form, understandably, is more likely to be found in companies that comprise a single individual.
If you are considering incorporating your small business or business venture, the Minneapolis incorporation lawyers [http://www.skjold-barthel.com] of Skjold Barthel are available to answer any questions that any business owner may have.