In general, a corporation is formed under state law by filing a charter with the state. This grants the corporation legal status as an entity separate from its owners or shareholders. This means that they can enter into contracts on their own behalf and be held liable for any debts incurred. They also have certain responsibilities such as paying taxes.
Corporations are generally better suited to larger businesses with multiple employees or when there is potential for significant liability. Under Indian law, companies, governing bodies, etc. and several other non-human entities are granted the status of legal entities. This means that they have correlative rights and obligations; they can sue and be sued, own and transfer property.
Because these non-human entities have no voice, they are legally represented through tutors and representatives to claim their legal rights and fulfill their legal duties and responsibilities. The specific non-human entities that are granted legal entity status include corporate personality, body politic, charitable unions, etc. The creation of a joint stock company involves a legal process called constitution in which legal documents are drafted that contain the main purpose of the company, the name and location, and the number of shares and types of shares issued. When considering which business structure to choose, it is important to consider the taxes, liability, and formation of each of them.
Corporations are the most complex business structure but can be beneficial for larger businesses with multiple employees or when there is potential for significant liability. In summary, corporations are created under state law by filing a charter with the state. This gives them legal status as an entity separate from their owners or shareholders. Corporations are generally better suited to larger businesses with multiple employees or when there is potential for significant liability.
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