Corporate Accounting Challenge

Characteristics of a Corporation

• A characteristic of a corporation is its separate legal existence, which means it is a separate entity from its owners.

Disadvantages of a Corporation

• A disadvantage of a corporation compared to other forms of organization is double taxation, where the corporation's profits are taxed, and then the shareholders' dividends are also taxed.

Advantages of Large Publicly-Traded Companies

• Large publicly-traded companies may have different advantages compared to small private companies, such as access to more capital through the sale of stock, and greater liquidity for investors.

Public vs. Private Corporations

• A major characteristic that distinguishes a public corporation from a private corporation is public ownership, where a public corporation's stock is available for the general public to buy and sell, whereas a private corporation's stock is not publicly traded.

Advantages of Separate Legal Existence

• The primary advantage of a corporation's separate legal existence is limited liability, which means that the owners' (shareholders') personal assets are protected in case the corporation is sued or incurs debt.