Overview of the Different Types of Corporations

Types of corporations

Each type of corporation has liability as an entity. However, many times the individuals employed by a company are not held liable for the actions of that entity. Yet, employees of a corporation can be held liable in cases where they acted alone or without permission from the corporation.

S corporation

S corporations enjoy limited liability, just as many other types of corporations do. The factor which sets apart an S corporation is the singular taxation on the profits of the company. The dividends are distributed to shareholders and employees before the profits are taxed. Each individual is then responsible to declare those dividends as income and pay taxes as an individual.

C corporation

C corporations are those corporate entities which receive double taxation on the profits of the company. The profit is taxed at the corporate level and again when it is distributed to shareholders. C corporations can become S corporations in order to receive singular taxation, but it is dependent on the number of shareholders.

Multinational corporation

Multinational corporations are those corporations which conduct business in more than one country. In most cases, a multinational corporation will have their headquarters in one country with offices being found in many other countries.

Corporate law

Corporate laws include those laws which govern the actions and legality of those actions, of corporations as an entity. In most cases, individuals cannot be held liable for actions of the corporate entity, unless they acted as individuals rather than employees of that company.

Umbrella corporation

Umbrella corporations are those corporations which offer legal and financial protection, as well as services too many smaller corporations. For example, umbrella corporations may distribute products from several manufacturing corporations and then become responsible for any recalls of those products.

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