Corporation vs. Company: What's the Difference?
Edited by Sawaira Riaz || By Sumera Saeed || Updated on October 9, 2023
A corporation is a specific legal entity with shareholders, while a company is a general term for any business entity.
Key Differences
A corporation is a business structure that's legally distinct from its owners and has its own rights and responsibilities. A company, in contrast, is a broader term that refers to any business, regardless of its legal structure.
Sumera Saeed
Oct 09, 2023
Corporations offer liability protection to their shareholders, meaning the personal assets of shareholders are generally protected from corporate debts. Companies can be any type of business, such as sole proprietorships, partnerships, or corporations, each with its own liability implications.
Sumera Saeed
Oct 09, 2023
While all corporations are companies, not all companies are corporations. A company might operate as a partnership, sole proprietorship, or another business type.
Sumera Saeed
Oct 09, 2023
A corporation is created through a legal process and is subject to specific regulatory requirements, including governance by a board of directors. A company doesn't necessarily have these stipulations unless it is also a corporation.
Janet White
Oct 09, 2023
When discussing ownership, corporations have shareholders who own shares or stock in the business. Companies, depending on their structure, might refer to owners, partners, or members.
Sumera Saeed
Oct 09, 2023
ADVERTISEMENT
Comparison Chart
Legal Status
A specific legal entity with distinct rights.
A general term for any business entity.
Sumera Saeed
Oct 09, 2023
Liability
Shareholders have limited liability.
Liability varies based on the type of company (e.g., partnership).
Sumera Saeed
Oct 09, 2023
Ownership
Owned by shareholders.
Can be owned by a single person, partners, members, or shareholders.
Sumera Saeed
Oct 09, 2023
Creation
Formed through a specific legal process.
Can form casually or through legal processes.
Sumera Saeed
Oct 09, 2023
Examples
Apple Inc., Microsoft Corporation.
Joe's Diner, Smith and Partners, Apple Inc.
Harlon Moss
Oct 09, 2023
ADVERTISEMENT
Corporation and Company Definitions
Corporation
A legal entity distinct from its owners.
The corporation was sued, not the shareholders.
Sumera Saeed
Oct 09, 2023
Company
Any business entity, regardless of structure.
His company is a sole proprietorship.
Harlon Moss
Oct 09, 2023
Corporation
An entity governed by a board of directors.
The corporation's board made the final decision.
Harlon Moss
Oct 09, 2023
Company
An entity that can hire employees.
The company hired twenty new staff members this month.
Harlon Moss
Oct 09, 2023
Corporation
A business that can buy, sell, and own property.
The corporation purchased the building downtown.
Aimie Carlson
Oct 09, 2023
ADVERTISEMENT
Company
An association of individuals in a business enterprise.
She started a company with her college friends.
Sawaira Riaz
Oct 09, 2023
Corporation
A business structure offering limited liability to shareholders.
Many choose a corporation for liability protection.
Sawaira Riaz
Oct 09, 2023
Company
An organized group involved in trade.
The company has been profitable for five years.
Sumera Saeed
Oct 09, 2023
Corporation
An entity that pays taxes separately from its owners.
The corporation filed its taxes in April.
Sumera Saeed
Oct 09, 2023
Company
An organization engaged in commercial, industrial, or professional activities.
The tech company launched a new product.
Sara Rehman
Oct 09, 2023
Corporation
An entity such as a business, municipality, or organization, that involves more than one person but that has met the legal requirements to operate as a single person, so that it may enter into contracts and engage in transactions under its own identity.
Sumera Saeed
Jun 29, 2019
Company
One's companions or associates
Moved in fast company.
Is known by the company she keeps.
Sumera Saeed
Jun 29, 2019
FAQs
What's the main distinction between a corporation and a company?
A corporation is a specific legal entity, while a company is a broader term for any business.
Sumera Saeed
Oct 09, 2023
Do corporations always have stock or shares?
Typically, yes, corporations issue stock or shares to represent ownership.
Sumera Saeed
Oct 09, 2023
Are all companies corporations?
No, companies can be various structures, only one of which is a corporation.
Sumera Saeed
Oct 09, 2023
Can a single individual form a corporation?
Yes, single individuals can form corporations in many jurisdictions.
Sumera Saeed
Oct 09, 2023
Which is better for a new business, becoming a corporation or a company?
It depends on the business goals, liability concerns, and tax considerations.
Sara Rehman
Oct 09, 2023
Can a corporation be a small business?
Yes, corporations can be small, medium, or large businesses.
Sawaira Riaz
Oct 09, 2023
Can both a corporation and a company have employees?
Yes, both corporations and other types of companies can hire employees.
Sumera Saeed
Oct 09, 2023
How do corporations and companies pay taxes?
Corporations pay taxes separately from their owners; other company types might have pass-through taxation.
Sumera Saeed
Oct 09, 2023
Can the terms corporation and company be used interchangeably?
While all corporations are companies, not all companies are corporations, so context is essential.
Sara Rehman
Oct 09, 2023
Can a corporation own another company?
Yes, corporations can own or have stakes in other businesses, whether they're corporations or other types of companies.
Sara Rehman
Oct 09, 2023
Is it challenging to change a business from a company to a corporation?
Transitioning involves legal processes, and complexity varies based on jurisdiction and business size.
Aimie Carlson
Oct 09, 2023
How do partnerships differ from corporations and companies?
Partnerships are a type of company with two or more owners; they lack the liability protection of corporations.
Janet White
Oct 09, 2023
How does ownership transparency differ between corporations and companies?
Corporations typically have clearer ownership structures via stock, while other companies might not.
Aimie Carlson
Oct 09, 2023
Which has more regulatory oversight, a corporation or a company?
Corporations generally face more regulations due to their distinct legal status.
Sara Rehman
Oct 09, 2023
Can both corporations and companies go public?
Typically, only corporations go public by issuing stock in an IPO, but the exact requirements can vary by jurisdiction.
Janet White
Oct 09, 2023
Is the liability protection always absolute in corporations?
While corporations offer limited liability, certain actions or negligence can pierce this protection.
Sumera Saeed
Oct 09, 2023
Are there global differences in defining a corporation and a company?
Yes, definitions and implications of these terms can vary by country.
Sumera Saeed
Oct 09, 2023
Do corporations always need a board of directors?
Most jurisdictions require corporations to have a board, but its composition can vary.
Janet White
Oct 09, 2023
Do corporations have a longer lifespan than other companies?
Corporations can continue beyond the lives of their owners, while other company types might dissolve upon an owner's departure.
Harlon Moss
Oct 09, 2023
Do both corporations and companies contribute to the economy?
Yes, both play vital roles in economic activity, job creation, and innovation.
Janet White
Oct 09, 2023
About Author
Written by
Sumera SaeedSumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
