Corporations are business partnerships of two or more people that are considered separate legal entities from their individual shareholders or partners. Corporations also attract lower tax rates on their earnings than individual incomes.
Body of law
The legal status of most corporations and their creation, organization and dissolution rests with the individual states they are based in, while out-of-state corporations must register with the state government to do business there. The federal government derives most of its power over corporations via the Securities Act of 1933, which regulates the issuance and sale or corporate securities.
Corps and taxes
Corporations are taxed at a favorable rate over individuals and are eligible for special tax deductions as well as the same deductions applying to sole proprietorships. However, corporations are also subject to 'double taxation' because their profits are taxed both to the corporation when earned and to the shareholder when distributed as dividends, for which the corporation cannot claim a tax deduction.