Corporations generate the majority of total business dollars in the United States. The corporation, as a form of business ownership, has both advantages and disadvantages. One of the main advantages of a corporation is that owners have protection against liability, because the corporation is a separate entity. With sole proprietorships and partnerships, the individual assets of the owners are at risk, but that is not the case with corporations. The owners of a corporation are stockholders, or shareholders, who have stock in the company and may also receive dividends. The stockholders' equity includes preferred stock, common stock, additional paid‐in capital, retained earnings, and treasury stock and is reported on the corporation's balance sheet.

At A Glance