What is a corporation in legal terms?

A corporation, in legal terms, is defined as a business entity that is owned by multiple investors but is treated as a single entity, separate from its owners. This means that the corporation can enter contracts, own assets, and incur liabilities independent of the personal assets of its shareholders. One of the key advantages of a corporation is limited liability, which protects its shareholders from being personally liable for the debts and obligations of the business. This structure also allows for easier transfer of ownership through the sale of stock, enhances credibility with suppliers and lenders, and can lead to more favorable tax treatment in certain situations. The legal framework surrounding corporations promotes growth and investment by allowing individuals to participate in the business without risking their personal assets.