A corporation is what you think of when you think about a publicly traded company like Apple or Microsoft. They are owned by shareholders, and managed by a board of directors appointed by the shareholders. There are also corporations used by small businesses called close corporations. They also have the ability to have flow-through taxation due if they elect Subchapter-S status. Only certain corporations qualify for Subchapter-S status (but that's another article).
Corporations used to be the dominant form in small business but are being gradually replaced by the more flexible LLC. Generally, this office recommends LLCs over the corporate structure most of the time. However, they still have relevance for the following:
- you need C-Corporation taxation if you plan to go to a public offering;
- you need S-Corporation taxation; or
- you are forming a non-profit entity