Main Post As per Yates, Berenicki-Korol and Clarke (2013) a corporation is a legal entity owned by more than one entity that is separate and distinct. The notion of an in corporate entity came about in response to the requirements to fund large economic activities excluding the limitations linked to sole traders and partnerships (p.385). Accordingly, incorporated companies benefit from a number of privileges and duties that individuals hold; in that, a corporate entity has the rights to enter into a contractual arrangement, finance other entities, and borrow from financial institutions, sue or be sued, hire workers, pay taxes own assets, and the like (Investopedia, LLC, 2015). As per Walmart stores Inc., it is apparent that the company is incorporated …show more content…
Since the company required money to expand, it wanted to create a situation whereby potential investors were not burdened with the daily management of the business or participate in various activities - hence, turning the company into a corporation was prudent (Yates, Berenicki-Korol and Clarke, 2013, p.391). Asides from the aforementioned, based on Innovation, Science and Economic Development Canada (2011) when an entity is incorporated, this limits the liability of the corporation's shareholders. This translates that, as a general rule a corporation's shareholders are not accountable for its debts. Furthermore, by and large – it is less challenging for corporations to accumulate funding than it is for other forms of business. For instance, whilst other types of businesses must depend solely on their own revenue and loans for capital – corporations have the option of issuing bonds or share certificates to investors. Furthermore, since corporations are taxed separately from their shareholders, and generally corporate tax rate is lower than the individual tax rate – incorporation may offer entities some fiscal advantages. In addition, while other forms of businesses cease to exist upon the death of the owner or owners, a corporation would continue to exist even if every shareholder and director were to die. (Innovation, Science and Economic Development Canada,