Corporations
Definition
A corporation is a legal entity separate from its owners that can enter contracts, sue and be sued, own assets, pay taxes and borrow money.
Analogy
Imagine corporations as big ships sailing on economic seas. The ship itself represents the corporation - it has its own identity separate from its crew members (owners). Just like how ships can carry cargo (assets), face storms (lawsuits), or take on water (debt), so too can corporations navigate through business environments.
Related terms
Shareholders: These are individuals or institutions that legally own one or more shares of stock in public or private corporations.
Limited Liability Company (LLC): An LLC is another type of business structure that combines elements of partnerships and corporations where owners have limited personal liability for company debts.
Board Of Directors: This group governs activities in a corporation, making major decisions and setting policies. They are elected by shareholders.
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