The Advantages And Disadvantages Of Incorporating A free essay sample

Business Essay, Research Paper The Advantages and Disadvantages of Integrating a Business In order to advert all the advantages and disadvantages of integrating a concern, foremost I should seek to explicate what a corporation is. In 1819, Chief Justice Marshall of the United States Supreme tribunal said: # 8221 ; A corporation is an unreal being, unseeable, intangible, and bing merely in contemplation of the law. # 8221 ; In the Webster # 8217 ; s College Dictionary corporation is defined as # 8220 ; an association of persons, created by jurisprudence and holding an being apart from that of its members every bit good as distinguishable and built-in powers and liabilities. # 8221 ; A corporation is divided into many units called portions of stock. The proprietors of the stock are called shareholders or stockholders. One of the advantages of integrating a concern is that because a corporation has a legal being, portions can be sold at any clip without impacting the operations of the corporation. Besides, portions can be bought at any clip. Another large advantage of integrating a concern is that corporation have limited liabilities. This means that the corporation is responsible for its ain Acts of the Apostless and duties under the jurisprudence. This characteristic protects the shareholders of the corporation because the lone fiscal loss that they may endure is limited to the sum invested. Besides, the creditors of the corporation can non travel beyond the assets of the corporation to fulfill their claims. The shareholders or the stockholders are the 1s who have control over the direction of a corporation # 8217 ; s operation and activities. They are the 1s who elect the board of managers, and the board of managers are responsible to the shareholders. Besides, the board of managers are responsible for the direction of the daily operation of the corporation. They besides decide when and how much of their income to give to the shareholders or stockholders. Another characteristic that can be an advantage of integrating a concern is that corporations may be organized for non-profit-making organisations such as colleges, infirmaries, and others human-centered intents. However, most of the corporations are organized to gain a net income for shareholders. The biggest disadvantage of a corporation is that corporations are topic to revenue enhancements. Corporations are non like proprietary and partnership signifiers of organisation, they must pay federal income revenue enhancements. Besides, shareholders must pay income revenue enhancements on any dividends distributed to them. So, all the corporations are being revenue enhancement twice and it is what is call dual revenue enhancement. There are many advantages of integrating a concern. Before any organic structure decide to make that, they should analyze every instance in a peculiar manner and make up ones mind if it is deserving it to integrate a concern. Most of the biggest concern in the universe have become corporations because it is easy to command and better manner to acquire new capital.