Light

Corporations

Definition

Corporations are legal entities formed by individuals or groups for conducting business activities. They have separate legal identities from their owners and can own assets, enter contracts, and be held responsible for their actions.

Analogy

Picture a corporation as a superhero team like the Avengers. Each member has their unique skills (shareholders), but when they come together, they form a powerful entity with its own identity (the corporation) that can accomplish great things.

Related terms

Limited Liability: Limited liability is a legal concept that protects individual shareholders from being personally responsible for the debts or actions of the corporation beyond their investment.

Corporate Personhood: Corporate personhood is the legal recognition that corporations have certain rights and protections similar to those of an individual person under the law.

Shareholder: A shareholder is an individual or entity that owns shares or stock in a corporation, representing ownership interest and potential profit participation.