Corporation Overview

A corporation is a form of doing business that normally provides its shareholders with a shield against creditors of the corporation, unless the shield could be "pierced" or the shareholders give personal guarantees. A regular, or "C", corporation is subject to tax as if it is a separate person, and the shareholders receive only the earnings of the corporation reduced by the taxes paid by the corporation. Also, if the corporation runs a net loss, the shareholders are not able to claim the loss on their own tax returns. 

An "S" Corporation is not really a different type of corporation. It is a special tax designation applied for and granted by the IRS to corporations that have already been formed.  “S” Corporations “pass through” their profits and losses directly to the shareholders, who report the income or losses their personal returns. 

A corporation is formed by filing Articles of Incorporation with an appropriate state official, such as the Secretary of State.

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