Corp, short for corporation, refers to a legal entity that is distinct and separate from its owners or shareholders. It is formed by individuals or groups who pool their resources together to conduct business activities with the main objective of generating profit. A corporation is granted legal recognition and rights, similar to those of an individual, which allows it to enter into contracts, initiate lawsuits, own assets, and be taxed separately from its owners.
The key characteristic of a corp is its limited liability. This means that the owners, also known as shareholders, are not personally responsible for the debts and liabilities of the corporation beyond their investment in the company. In case of bankruptcy or financial issues, the shareholders' personal assets are protected.
Corporations have a perpetual lifespan as they can continue to exist even if there are changes in ownership or management. They can issue stocks or shares, allowing individuals to invest in the corporation and become shareholders. These shares represent ownership in the company and can be freely transferred or sold.
Corps may be classified into different types based on their structure and ownership, such as C corporations, S corporations, or LLCs (Limited Liability Companies). The purpose and operations of a corp depend on its objectives, industry, and jurisdiction, with some operating for-profit, others as non-profit, and some fulfilling specific social or environmental goals.
