The Different Types of Business Corporations

Throughout the entire course of business operations, successful business leaders establish realistic and achievable objectives for the business, and then they rally groups to work together and bring them to pass. These objectives and goals are company objectives; they are what the business wants to achieve to be successful, to succeed, to achieve its marketing objectives, and most importantly to deliver effectively. A business can only move forward with the collective objectives that have been agreed upon and determined by the owners and the managers. These objectives not only define the end result of the business, but they are the driving force behind the business, and help it to become what it is today.

In business there are many types of relationships that exist. In a partnership, there are two parties that come together in an agreement to perform certain functions or services for one another at a mutually agreed upon price. A corporation is considered a partnership in that a corporation performs functions for either an individual shareholder or a group of shareholders. A partnership in many businesses consists of two separate companies that come together to form a new entity. Many businesses today incorporate themselves as separate entities from their original parent companies, or form a limited liability corporation instead.

Limited liability companies (or LLC’s) are very similar to partnerships; however, instead of two investors, one investor controls all the assets and liabilities of the company while the other owns none, making it a great way for limited liability situations. One of the most common forms of these arrangements is a C corporation or limited liability company. The C corporation is often used as an entity for purchases or financing residential mortgages, which helps the lending institution make money off of a borrower, while avoiding the high costs associated with lending. An LLC is often used as an investment vehicle, allowing the owners to reap the benefits without putting themselves at risk.