Corporation - An entity chartered by a state that provides its shareholders with certain rights and privileges.

This entity is the most common form of business organization. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern.

There are many types of corporate entities, each with distinct characteristics (see tax tips for specific advantages and disadvantages for some of the entities).

Some common corporate entities are S corporations, C corporations and LLCs. The process of becoming a corporation, called incorporation, gives the company its corporate status.

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