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Corporation
Establish Your
Organization
 Finance Your
Business
 Tax and
Licenses
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Maintain

A corporation is a fictitious legal entity (or person) that has rights and duties independent of the rights and duties of real persons and is legally authorized to act in its own name through duly appointed agents. It is liable for debts and can make contracts and pay taxes. Corporations exist only because state statutory laws allow them to be created.

A business corporation issues shares of its stock, as evidence of ownership, to the person or persons who contribute the money or business assets that the corporation will use to conduct its business. Thus, the stockholders or shareholders are the owners of the corporation, and they are entitled to any dividends the corporation pays and to all corporation assets if the corporation is liquidated.

The main reason most businesses incorporate is to limit owner liability for the amount invested in the business. Generally, stockholders in a corporation are not personally liable for claims against the corporation and are, therefore, at risk only to the extent of their investment in the corporation. Corporations must register with DCRA’s Corporations Division.

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