Being an artificial or fictitious person, it can only act through its directors, who are elected by the shareholders, and its officers, who are appointed by the directors. A corporation may be formed for a wide variety of purposes, both profit or non-profit. Shareholders have limited liability in most cases. This limited liability is not absolute and a corporate shareholder can still be liable for the full price of his corporate stock if the stock was purchased at a discount.
Shareholders are also liable, in most states, for unpaid wages.
Ownership of corporate stock may be transferred freely by sale or by gift. The corporation has perpetual existence that remains unaffected by the death of any director, officer, or shareholder. The corporation, as a legal person, can sue and be sued, make contracts, hold both real and personal property, and issue stock. Finally, a corporation can elect the advantage of being an S corporation and the use of Section 1244 stock. Internal Revenue Code Section 1244 was enacted in an attempt to attract financing for small businesses.