The Advantages And Disadvantages Of Incorporating A Business

The Advantages and Disadvantages of Incorporating a Business


     In order to mention all the advantages and disadvantages of

incorporating a business, first I should try to explain what a corporation is.

In 1819, Chief Justice Marshall of the United States Supreme court said: " A

corporation is an artificial being, invisible, intangible, and existing only in

contemplation of the law." In the Webster's College Dictionary corporation is

defined as "an association of individuals, created by law and having an

existence apart from that of its members as well as distinct and inherent powers

and liabilities."  A corporation is divided into many units called shares of

stock. The owners of the stock are called stockholders or shareholders.  One of

the advantages of incorporating a business is that because a corporation has a

legal existence, shares can be sold at any time without affecting the operations

of the corporation.  Also, shares can be bought at any time. Another big

advantage of incorporating a business is that corporation have limited

liabilities. This means that the corporation is responsible for its own acts and

obligations under the law.  This characteristic protects the stockholders of the

corporation because the only financial loss that they may suffer is limited to

the amount invested. Also, the creditors of the corporation can not go beyond

the assets of the corp
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