A corporation is a 'person' in the eyes of the law. A corporation functions in the same manner as a person and has the same rights and responsibilities as a person. The corporation may make contracts, assume liabilities, sue and be sued. The corporation and its shareholders and directors have specific duties and obligations to each other. A business corporation is formed for the purpose of transacting business in the broadest sense of the word, and these transactions are conducted to return a profit.
Business corporations are either domestic or foreign corporations.
A domestic corporation has been incorporated under the laws of a specific State. A foreign corporation has been incorporated under the laws of another state or country and, by registering with the state, may be authorized to do business within a different State. A close corporation can choose not to have a board of directors, annual meetings or bylaws if so stated in its articles of incorporation. Professional corporations are formed by those persons licensed to practice certain professions which are eligible to be shareholders in this type corporate entity. Taxes on profits of a C-Corporation are paid by both the corporation itself and the shareholders when the profits are received as dividends.