What is a corporation?

A corporation is a separate legal entity which exists separately from the shareholders and has a perpetual life. When the corporate formalities are properly followed, the shareholders, directors and officers of the corporation are not personally liable for any debts and obligations of the corporation. Corporations are required to keep formal minutes, have meetings, and record resolutions. The corporation (C corporation) is essentially taxed twice; once on its profits and again when shareholders are taxed on their personal income at the time they receive dividends (unless the corporation elects to be treated as a S corporation).