Stock Corporation Overview
A stock corporation is a for-profit company that issues shares of stock to raise money. Shareholders own part of the company and may receive dividends. They also have voting rights on corporate decisions. To form a stock corporation, articles of incorporation are filed. This registers the company and provides basic information. Stock is then issued to shareholders. There are two main types: C corporations and S corporations. In a C corporation, the company pays corporate taxes. Shareholders pay taxes on dividends. In an S corporation, profits and losses pass through to shareholders’ personal taxes.
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Advantages of Stock Corporation
- Limited liability for shareholders
- Easier access to capital through the stock market
- Ability to raise large amounts of capital for growth
- Continuity beyond the lifetimes of initial shareholders
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Disadvantages of Stock Corporation
- Complex regulations and reporting rules
- Double taxation for C corporations
Stock Representation in a Corporation
Shareholders buy stock of a corporation, so they partly own it. Shares give voting rights, dividends, and part of assets. Incorporation paperwork is filed, then stock issued. Two types: C and S corps. C corps pay Corporate taxes. Shareholders pay taxes from their dividends. In an S corp, shareholders pay the taxes personally.
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Advantages of Stock Representation
- Limited liability and stock market access
- More money could fund company growth
- Lasts beyond original shareholders
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Disadvantages of Stock Representation
- Complex rules and reporting
- Double taxation for C corporations
Stock Corporation and Fundraising
What is a stock corporation stock? A corporation issues stock to raise money. Shareholders own part of it and may receive dividends. They vote on decisions. To form a corporation, paperwork is filed to register it and provide information. Stock is then issued to shareholders. There are C and S corporations. C corps pay taxes. Shareholders pay taxes on dividends. S corp profits and losses pass to shareholders’ taxes.
- Overall View
- Stock corporations raise funds through stock sales
- Despite complexity, they limit liability and allow continuity beyond owners
- The structure offers features big companies need