A corporation is one of the three types of business organizations; the others are partnership and sole proprietorship. Corporation is the most common business organization as it posses the most benefits among all three. This is why large multinational companies like Apple and Microsoft are corporations because it is more advantageous for large business to form this type of business organization.

A Corporation is an Entity
Most state laws consider a corporation as a person separate from its owners. This grants the actual owners what is called a “limited liability”. This means that when a corporation has a debt, the owners are not the one responsible for paying it but the corporation itself. Another benefit of this limited liability is that when the corporation is sued the owners and investors are not included since they are separate persons from the business organization. This feature of a corporation is the reason why most companies tend to incorporate.

A Corporation can be Profit or Non-profit
Although most corporations are profit business organizations, there are also corporations that are non-profit type. Churches or religious organizations and charities are the most common non-profit corporations and are usually exempted from any form of taxation, particularly the religious organizations.

A Person can Form a Corporation
Most corporations are formed by several owners giving rise to board of directors. This is common with profit corporations. But for non-profit ones like a religious organization or a constitutional monarchy, it can reduce the complexity of a typical corporation by eliminating the concept of board of directors and put into place one office holder to preside over the activities of the organization, creating a corporation sole. The most renowned example of corporation sole of a non-religious type is the British Monarch.

Corporations could outlast its owners
Once a corporation is created it becomes an entity whose existence may not be dependent to its owners. This is because even if a shareholder dies or sells his or her share the ownership is passed on to another person. This could be the person who inherits the share or the one who buys it. This aspect of a corporation makes it attractive to investors since it has a stability not found in sole proprietorship and partnership.

Corporate Taxation
Profit corporations pay taxes. But this does not mean that the owners are also paying for them. In most countries, a corporation pays taxes apart from the owners. This is because of the legal provision that a corporation is a legal person separate from its owners.

As we learn more about the business organization known as corporation its benefits become clearer and we gain a better understanding why most, if not all, companies, small and large, local and multinational, form a corporation.