Company A corporation offers a business owner the chance to separate himself or herself from the full weight of their business and its liabilities.
Incorporation also offers business owners relief from business taxes.
All corporations are legal business structures regulated by state incorporation laws, as well as by state and federal tax laws. Under the law, an incorporated business becomes a legal entity capable of entering into contracts, incurring debts and paying taxes separately from its owners. For-profit corporations have the legal framework to issue ownership interests as shares of private or public stock. C corporations also allow owners to deduct fringe benefits as a business expense. Electing to do business as an S corporation lets shareholders enjoy limited liability status, as would be true of any corporation, but be taxed like a partnership or sole proprietor.