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The Advantages and Disadvantages of Incorporating a Business In order to mention all the advantages and disadvantages of incorporating a business first I should try to explain what a corporation is In 1819 Chief Justice Marshall of the United States Supreme court said A corporation is an artificial being invisible intangible and existing only in contemplation of the law In the Websters College Dictionary corporation is defined as an association of individuals created by law and having an existence apart from that of its members as well as distinct and inherent powers and liabilities A corporation is divided into many units called shares of stock The owners of the stock are called stockholders or shareholders One of the advantages of incorporating a business is that because a corporation has a legal existence shares can be sold at any time without affecting the operations of the corporation Also shares can be bought at any time Another big advantage of incorporating a business is that corporation have limited liabilities This means that the corporation is responsible for its own acts and obligations under the law This characteristic protects the stockholders of the corporation because the only financial loss that they may suffer is limited to the amount invested Also the creditors of the corporation can not go beyond the assets of the corporation to satisfy their claims The stockholders or the shareholders are the ones who have control over the management of a corporations operation and activities They are the ones who elect the board of directors and the board of directors are responsible to the stockholders Also the board of directors are responsible for the management of the day-to-day operation of the corporation They also decide when and how much of their income to give to the stockholders or shareholders Another characteristic that can be an advantage of incorporating a business is that corporations may be
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