Explore BrainMass

This post addresses corporations as the form of entity.

When forming a company, the options are sole proprietor, partnership, and corporation. Most choose incorporation. Why is the corporate form seen to be best? What rights do the stockholders have?

Solution Preview

The corporate form is often seen as the best form due to the tax advantages of a corporation. The corporation is an entity of itself, and there is no double taxation. The corporation pays taxes on their net income at the appropriate tax rate, but the owners of the company do not pay again on their personal tax returns. A corporation is also the best form from a liability standpoint, because it is a separate entity, and owners are usually liable personally only for the amount up to their initial contribution in the corporation. In ...

Solution Summary

The solution provides a detailed discussion explaining why most choose incorporation when forming a business, and why the corporate form is seen as to be the best. The solution also thoroughly discusses the rights that stockholders have.