business organized as a separate legal entity with ownership evidenced by shares of stock. The corporation is formed by filing the articles of incorporation with the state authority, who returns it with a certificate of incorporation; the two documents together become the corporate charter. Each founding stockholder receives from the company a specified number of shares of capital stock. A stockholder may sell owned shares to other investors. The corporation is a legal entityseparate from its owners. Advantages of a corporation are the ability to obtain large amounts of financing through a public issuance, ease of transferring shares, limited liability of owners, unlimited life, and professional management.

legal entity, chartered by a U.S. state or by the federal government, and separate and distinct from the persons who own it, giving rise to a jurist's remark that it has "neither a soul to damn nor a body to kick." Nonetheless, it is regarded by the courts as an artificial person; it may own property, incur debts, sue, or be sued. It has three chief distinguishing features:

1. limited liability; owners can lose only what they invest.
2. easy transfer of ownership through the sale of shares of stock.
3. continuity of existence.

Other factors helping to explain the popularity of the corporate form of organization are its ability to obtain capital through expanded ownership, and the shareholders' ability to profit from the growth of the business.

business organization treated as an entity-an artificial person distinct from its owners-in the eyes of the law. Ownership is represented by shares of stock. A corporation has three distinguishing characteristics: (1) separation of ownership from management and limited liability, i.e., its liability to creditors is limited to its resources, unlike partnerships or sole proprietor businesses that have unlimited personal liability; (2) the ability to negotiate contracts and own property; and (3) transferable ownership, assuring its existence beyond the lives of its stockholders. Stockholders elect corporate directors, who in turn decide its policies.

legal entity, chartered by a state or the federal government, and separate and distinct from the persons who own it, giving rise to a jurist's remark that it has "neither a soul to damn nor a body to kick." Nonetheless, it is regarded by the courts as an artificial person; it may own property, incur debts, sue, or be sued. It has four chief distinguishing features: (1) limited liability (owners can lose only what they invest); (2) easy transfer of ownership through the sale of shares of stock; (3) continuity of existence; and (4) centralized management. Other factors helping to explain the popularity of the corporate form of organization are its ability to obtain capital through expanded ownership, and the shareholders' ability to profit from the growth of the business.

a legal entity properly registered with the secretary of state. Can have limited liability , perpetual life, freely transferable shares, and centralized management.

Example: Abel wants to start a real estate brokerage business with $100,000 of his own money. He asks his attorney to form a corporation with Abel as the sole stockholder. The corporation may bankrupt but Abel's other assets are not affected.