ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A corporation is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations are allowed to enter into contracts, sue and be sued, own assets, remit federal and state taxes, and borrow money from financial institutions.

Detailed explanation-2: -A corporation is a business entity that is owned by its shareholder(s), who elect a board of directors to oversee the organization’s activities. The corporation is liable for the actions and finances of the business – the shareholders are not.

Detailed explanation-3: -Shareholders are essentially the owners of a company, while the directors are a person or group who make and approve high-level decisions on the company’s behalf.

Detailed explanation-4: -A corporation’s business and affairs are managed by or under the direction of its board of directors. Although the board has the power to make all decisions on behalf of its corporation, many business decisions are actually made by the corporation’s officers.

Detailed explanation-5: -A person who owns shares in your corporation is a shareholder. Shares represent an ownership interest in the corporation. They are property, much like a car or a house. Any “person” can hold shares in a corporation.