【文章內(nèi)容簡介】 DISCUSSION THE CORPORATE FORM OF ORGANIZATION CORPORATIONS： A corporation is a separate legal entity, having existence separate and distinct from their owners (., stockholders). In essence they are artificial beings, existing only in contemplation of law. In the United States, a corporation is typically created when one or more individuals file articles of incorporation with a Secretary of State in the particular home state in which they choose to bee domiciled. The articles of incorporation will generally specify a number of important features about the purpose of the corporate enti ty and how general governance of ongoing operations will be structured. After reviewing the articles of incorporation, the Secretary of State will issue a charter (or certificate of incorporation) authorizing the corporate entity to e into being. The persons who initiated the filing (the incorporators) will then call a meeting to collect the shareholders39。 initial investment (this startup money will be placed into the corporate accounts) in exchange for the stock of the corporation (the stock is the financial instrument evidencing a person39。s ownership interest in the corporation). Once the initial stock is issued, a shareholders39。 meeting will be convened to adopt bylaws and elect a board of directors. These directors will then appoint the corporate officers who will be responsible for mencing the operations of the business. Of course, in a small start up venture, the initial incorporators may bee the shareholders, then elect themselves to the board, and finally appoint themselves to the bee the officers. Which leads one to wonder why all the trouble of incorporating? The reasons for incorporating can vary, but there are certain unique advantages of this form of anization that have lead to its popularity: Perhaps the first and most obvious advantage of the corporate form of anization is that it permits otherwise unaffiliated persons to join together in mutual ownership of a business entity. This objective can be acplished in other ways, like a partnership, but the corporate form of anization is arguably one of the better vehicles. Large amounts of venture capital can be drawn together from many individuals, and concentrated into one entity under shared ownership. The stock of the corporation provides a clear and unambiguous point of reference to identify who owns the business and in what proportion. Further， the democratic process associated with shareholding voting rights (typically one vote per share of stock) permits a shareholder39。s say so in selecting the board of directors to be mensurate with the number of shares held. A great feature of corporate stock is transferability of stock is easily transferable from one person to another. In this context， a person can be an individual or another corporation. Transferability provides liquidity to stockholders， as it enables them to quickly enter or exit an ownership position in a corporate entity. And， although a corporation may bee very plex (., buying real estate， entering contracts， etc.)， the ability of one shareholder to step out and allow a successor to take their place can be done quite simply； there is not a need for the holdings and agreements of the corporate entity to be revised. As a corporation grows， it may bring in additional shareholders by issuing even more stock. At some point, the entity may bee sufficiently large that its shares will bee listed on a stock exchange and the shareholder group expanded to bee large and dispersed. You have probably heard of an IPO which is the initial public offering of the stock of a corporation. Rules require that such IPOs be acpanied by regulatory registrations and filings， and that potential shareholders be furnished with a prospectus detailing corporate information. The pricing of IPOs can vary based on market conditions， and sometimes get wild for a hot pany that seemingly everyone wants to own. Publicly traded (in contrast to closely held) corporate entities are subject to a number of continuing regulatory registration and reporting requirements that are aimed at ensuring full and fair disclosure. Another benefit of a corporation is its perpetual existence. A corporate entity is typically of unlimited duration， enabling it to effectively outlive its shareholders. Changes in stock ownership do not cause operations to cease， even when the change in ownership is brought about the death of a shareholder. Many corporate entities are over onehundred years old. You may wonder what would cause a corporation to cease to exist. At some point， a corporation may be acquired by another， and merged in with the successor. Or， a corporation may simply bee a business failure and cease operations (typically acpanied by a request to the Secretary of State to dissolve the legal existence). Of course, not all dissolutions are the result of failure. Some businesses may find that liquidating operating assets and distributing substantial residual monies to the creditors and shareholders is a preferable strategy to continued operation. Not to be overlooked in considering why a corporation is desirable is the feature of limited liability for stockholders. If you buy the stock of a corporation， you normally do so with the understanding that you can loose the amount of your investment， but no more. Stockholders are not liable for debts and losses of the pany beyond the amount of their investment. There are exceptions to this rule. In some cases， shareholders may be called upon to sign a separate guarantee for corporate debt. And, shareholders in closely held panies can inadvertently get drawn into having to satisfy corporate debts where they mingle their p