Corporations

A corporation is considered by law to be a unique "entity", separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.

If compared with sole proprietorships and partnerships, a corporation has distinct advantages. One of the weightiest factors is that shareholders have limited liability for the corporation's debts or judgments against the corporations. Generally, shareholders can only be held accountable for their investment in the stock of the company. Corporations have wider opportunities to raise additional funds through the sale of securities. They can transfer ownership through the transfer of securities. With all these advantages, we may wonder why there are much fewer unincorporated businesses than incorporated ones. Obviously, the answer has to do with the disadvantages of the corporation. To start with, the process of incorporation requires more time and money than other forms of organisations because this business organisation is to be created under a government charter. Corporations that are public, i.e. whose shares are sold to the public, are to disclose information about their finances and activities, which may be used by their competitors. Corporations are subject to double taxation. It means that in addition to corporate tax levied on the corporation’s profit shareholders must pay income tax imposed on their dividends.

The form of the business organisation an entrepreneur has chosen is not permanent. If the circumstances of his business change, he can always change the form of his business. For example, he may start his business as a sole proprietorship, but, as his business grows, he may take on a partner and become a partnership. Or, he may choose to incorporate in order to prevent his business creditors from pursuing his personal assets.

Language notes:

a lawsuit – судовий розгляд, позов;

if desired – при бажанні (див.нижче when needed – за необхідності; if given – поза наявності);

within the law – у рамках закону;

one and the same ­– те ж саме;

high-calibre employees – високопрофесійні працівники;

unless there is a defined process = if there is no defined process;

… a legal agreement that sets forth how … – … юридичну угоду, яка чітко формулює, як...;

up front – тут чесно, відкрито;

withdrawal – вихід з угоди, зі складу учасників;

to be sued – залучати як відповідача за позовом;

to be held accountable – нести відповідальність, звітувати;

to incorporate – інкорпорувати, зареєструвати як корпорацію;

incorporated – акціонерний, що має статус акціонерного товариства; зареєстрований як корпорація

i.e. – id est (Latin) = that is (to say) – тобто

Note the difference:

sole proprietor (US and UK) = sole trader (US)

public limited company (UK) = close(d) corporation (US)

private limited company = open corporation (US)

shareholders (UK) = stockholders (US)