Discuss the corporate form of business organization with respect to how it is created, the liability of persons having an ownership interest, how management is conducted, and duration of existence

Answer 1

A corporation is formed only by substantial compliance with a state incorporation statute. Promoters arrange for capital and financing, assemble necessary assets, and attend to the actual legal formation of the corporation. Typically, incorporators then execute and deliver articles of incorporation or a charter to the Secretary of State to create the corporation. Shareholders (owners) generally have limited liability, up to the amount of their investment, for the corporation's debts. Shareholders of a corporation elect a board of directors to manage the business. The board then appoints officers to run day-to-day operations. Typically, ownership and management are separate in large corporations. A corporation has perpetual existence unless otherwise stated in its articles of incorporation. The death, withdrawal, or addition of a shareholder, director, or officer does not terminate the existence of a corporation.