Corporation:

A corporation is an organization formed by a group of

persons, and it has rights and liabilities separate from
those of individuals involved. It may be a non-profit
organization engazed in activities for the public goods.
It may buy and sell property, enter into leases and
contracts as well as bring law suits. It pay taxes and it
can be prosecuted and punished, if it violates the law.
The term corporation has been defined under Section
2(11) of the Companies Act, 2013. Section 2(11) of the
Companies Act, 2013 defines corporation as body
corporate registered inside or outside India but
excludes cooperative societies, corporation sole or any
other corporation formed by the order of Central
Government.
1. The difference between company and corporations
is the size. The corporation is a big business or entity
whereas the company is a small business or entity.
2. The owners of a corporation are the shareholders
whereas the owner of the company is its members.
3. The corporation is more structured and complex than
a company.
 4. The management and owners don’t interfere in the
daily functions of the business in the corporation but
on the other hand, the company owners interfere and
run the daily tasks of the business.
5. There are more professionals observed in the
corporation as employees than the company.
6. The types of corporations are C Corporation and S
Corporation and the types of companies are sole
proprietorship, partnership, limited liability
corporation, limited liability partnership, and
corporation.
Kinds of corporation

1)S corporations

An S corporation is a business entity that passes almost all

finances through to its shareholders. These finances
include income and losses, as well as tax deductions and
credits. By passing all of these finances through to
shareholders, S corporations are able to be taxed like a
partnership but gain corporate perks.

More specifically, this means that shareholders are

responsible for income and loss. The S corp pays specific
corporate taxes pertaining only to passive income and
gains outside what the shareholders keep. This allows S
corps to avoid the double taxation that often comes with C
corps.

For example, let’s say you have a C corp with several

shareholders who have all invested the same amount.
Before those shareholders see their profit, your company
first has to pay corporate taxes on the income generated.
Then, the already-taxed money is paid out to the
shareholders as profit, who report it on their personal tax
returns and pay tax again.

Within S corp, the profits are passed directly to the S corp

shareholders, meaning shareholders are responsible for
the taxes. This allows the S corporation to avoid corporate
tax, as the profits are being taxed at a personal level when
the shareholders report it on their income tax returns.

But, there's a catch: any shareholders of an S corp can't be

corporations, nor can they be partners with the company.
This means shareholders are generally part of a trust or
estate. This limits who can be a shareholder, but again,
allows you to take advantage of lower corporate taxes in
many cases. You’re also limited to no more than 100
shareholders, which can limit future growth.

S corporations can be general partnerships, LLCs, or

corporations, making them rather flexible.

2) C Corporation: C Corporation is a corporation in which

the owner and the shareholders taxed separately.
Corporate tax and tax on personal income of shareholders.
It must hold annual general meeting and have a Board of
Directors. It required to hold at least one meeting in a
year. Minutes of meeting must be maintained to display
transparency. C Corporation must have file financial
statements.

3) Sole proprietorship: The corporation which runs under

the exclusive ownership and control of an individual, is
called the sole proprietorship. Under this form of
corporation, an individual may run corporation with
himself or may employ a few employees for helping him.

Character: 1) Total investment

2)Bear total responsibility.

3)Liability is unlimited

4)No need of appointment of director.

5)No need of notice.

6)Limited capital.

4) General corporation : In general corporation there is a

scope of unlimited number of shareholders and due to
separate legal entity, shareholders are protected from
creditors. The shareholders are only liable to an amount of
investment in the corporation.

Advantages:1) Owners personal assets are protected.

2) Corporations have unlimited life extending beyond the

illness or death of a owner.

3) Transfer of ownership by sale of stock so, it can be said

that change of ownership is possible without any affect.

In such corporation it is easy to raise capital.

De-merit:1) More legal formality.

2) More State and Central rules.

5) Close corporation: Close corporation are limited to 30

to 50 shareholders.
6) Statutory Corporation: Astatutory corporation is one
which is incorporated by a special Act of the Parliament
or State Legislature. Such corporations are generally
created for public utility services. LIC, FCI, GIC.