Characteristics of Corporation

Question 1

Corp: liability for owners, directors, officers?

Answer 1

Owners (shareholders), directors, and officers generally are not personally liable

Shareholders risk only their investment

Question 2

Corp: transferability of ownership?

Answer 2

Free transferability of ownership of a corporation

Question 3

Taxation of C Corp

Answer 3

C Corp: taxed as entity distinct from its owners

but double taxation: distributions are taxable income and corporation itself is taxed

Question 4

Taxation of S Corp

Answer 4

Taxed like partnerships

generally closely held corps, stock cannot be held by more than 100 people, shareholders must be individuals, only one class of stock, etc.

Question 5

B Corp

Answer 5

Benefit corporation: intends to benefit the public and environment AND its shareholders

Taxed the same as C corps

Must state benefit in articles of incorporation

Same limited liability and fiduciary duties but duties also owed to employees, customers, communities, and environment not just its shareholders