Legal Structure of Business Research Paper Example | Topics and Well Written Essays - 500 words

Legal Structure of Business - question Paper ExampleThere is no limit on the amount of stock a C Corporation can generate and there is a limited personal liability for stockholders which ar too beneficial. The Internal Revenue Service lists various approaches to the tax incomeation requirements for a C Corporation, part of the benefits of using the C Corporation is that the profit of a corporation is taxed when earned, and taxed to the shareholders when distributed. (Corporations, 2011 p 1) The elements most necessary in a planetary Corporation or C Corporation are three tiers of power, stockholders, directors and officers. Clear separation of responsibilities and rights for each position, no limit to size, directors run the company, directors are elected by stockholder vote, stockholders own the company, minority stockholders are not responsible for the company (clarify exactly what reflects a minor stockholder) and can be subchapter S if all the qualifications are met. (Incorpo rating 101, 2011 np) Being a subchapter S is a positive thing for companies with fewer than 100 stockholders. They are allowed tax relief in the form of avoiding the double taxation that occurs with many public companies. (Subchapter S, 2011 p 1) This means that kind of of the taxes being directed at the C Corporation they are directed at the dividends or stipend of the stockholders.