We no longer live in a Mom-and-Pop-store society. The neighborhood stores are being replaced by big box retail outlets, both brick-and-mortar and on-line ventures. Small local factories and companies are being bought out by larger companies.

We’ve become a society of large corporations.

So Goes the Nation, So Goes Business

It seems that the growth of American business has mirrored the growth of the United States. As the United States has grown from a small country of insular communities to a global super power, American industry has moved from mostly small businesses to giant corporations with thousands of employees worldwide.

The United States government sets up charters for corporations. This ensures that certain rules and regulations are followed by the corporation. For legal reasons, corporations are assigned a corporate personhood. That gives the corporations the same rights under the Constitution that individuals have. This personhood right allows corporations to buy properties and enter into contracts.

What Makes a Corporation?

A corporation is a legal entity entitling a group of people to act as an individual. In the past, governments were considered corporations, but today, the term corporation tends to refer to business, either for-profit or not-for-profit.

Corporations are defined largely by their tax status. Corporations are taxed differently than other business entities. There are two types of corporations: a C-corporation and an S-corporation. C-corporation is the more common type. There are fewer ownership restrictions, they must pay income taxes, and do not receive deductions on dividends paid to stock holders. All companies that are publicly traded on the stock market are C-corporations. C-corporations are the large corporations easily recognizable today.

The S-corporation is for small business and businesses with sole proprietors. The S-corporation pays no corporate taxes, but all profits and losses are passed directly to the private stockholders, who then adjust their personal income taxes accordingly. S-corporations can be large corporations, but they are privately owned. Large family-owned corporations fit this description.

Public Corporations

Public corporations are owned by the stockholders who purchase stocks that are traded in brokerage houses. The men and women who run a publicly-owned corporation must answer to the owner. It is possible to become a majority owner in a corporation. Many companies offer stocks to employees.