Corporation means “group”. This article will help you understand what a corporation is, its advantages and disadvantages, and its difference from Inc.

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Advantages – disadvantages of Corporation

What factors do a successful corporation need? What is the difference between Inc. and what is Corporation?

What is Corporation?

According to the English-Vietnamese dictionary, “Corporation” means “a group of people allowed to act as an individual” or briefly called “a corporation”. Many places also call it “corp” for short. In American English, corporation is also understood as “business company”. It also means “city council”. However, here we only analyze it with the meaning of “group”.

In Vietnam, a corporation is understood as a business legal entity whose owner is one or more different shareholders. They are the people who elect the leadership for the organization to take on the responsibility of managing and supervising the activities of the business.

What is Corporation? It is a corporation, a business legal entity owned by one or more shareholders

Corporations have separate owners and legal entities, the shareholders are usually the same people who have limited liability on the money they have contributed to buy shares of the company. However, shareholders are not responsible for the finances or operations of the organization, but the corporation itself takes care of that segment. Corporations can be for-profit organizations (e.g. businesses, trading companies, etc.) or non-profits (e.g. humanitarian organizations, charities, etc.).

Corporations are usually established in the country or territory in which they are conducting business. However, this is not mandatory! Some corporations are also established in another country, but they must prepare all kinds of documents to prove that they are doing business there and have fully paid taxes for that country.

Advantages and disadvantages of Corporation

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Continuing with the definition of what a corporation is, let’s explore the advantages and disadvantages of this type of business.

Advantage

Corporation shareholders have only limited liability for the corporation itself and its debts. As a result, their loss cannot be greater than the amount they have contributed to the business in the form of fees or stock payments. Corporations will help shareholders socialize their expenses. Limited liability also helps shareholders minimize the amount of money that can be lost when investing in the corporation. This also helps the corporation to raise large financial capital (for example, they can combine many stock owners).

Advantages of a corporation The structure and assets of a corporation can extend beyond the life of its shareholders. This helps to create stability for the corporation and helps them to accumulate capital. Financial issues are therefore always guaranteed at a stable level, it can use money to invest in larger projects.

Disadvantage

In some countries, corporate profits are heavily taxed, resulting in the company and its dividends being taxed separately. They will be taxed twice in this case. In addition, corporations also face situations where dividends are taxed at a lower rate than other income or shareholders are taxed directly on the profits of the company but dividends are not taxed. In the event that ownership is separated from management, the corporation will experience a number of functional disturbances.

What does a successful corporation need?

Customer Focus

Large corporations always know how to focus on customers, for them customer experience is always a top priority. They always know how to meet the needs of customers no matter how difficult the customer is. They clearly understand that just one negative comment from one customer is enough to ruin the entire effort to build a business for so long.

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The key to their success is taking great care of each and every customer that comes to them!

Ensure complete and detailed financial records

Financial records are the “secret weapon” of every business. Financial records must be complete and detailed so that viewers can easily see the company’s changes and fluctuations as well as see the shortcomings, the holes that need to be “patched”… With these, the leaders of the corporation can find the right direction to always “go ahead” and achieve success!

Full and detailed financial records are one of the factors that help the corporation always succeed

Innovate without stopping

You produce a lot of quality products, you gain a foothold in the market, but that’s not enough! The marketplace is a battlefield, you have a lot of competitors who are trying to “usurp” your business. Therefore, you must constantly innovate, improve product quality, apply advanced technologies… In this 4.0 era, you just need to stop or wait. Just being a little lazy is enough to lag behind others! So you can’t rest on your laurels, but must keep moving on, striving to achieve other heights!

Difference between Inc. and what is Corporation?

Inc. What is

?Inc. stands for “incorporated”, it means “collection”, “consolidation”, “incorporation”… The word “Inc.” is used to refer to a group of companies working together or a group of subsidiaries to form a large corporation. The condition for this consortium to exist is that the companies must jointly contribute shares and build together to make the group more and more developed. On the contrary, if a subsidiary of the corporation has problems, the whole group will join hands to help that individual overcome the difficulty.

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Corporation is a corporation, Inc. also a corporation. So what is the difference between them? Next, we will help you distinguish these two concepts so that you don’t get “brained” when people talk about them!

Corporation and Inc. What is the difference

?Corporation (also known as “Corp”) and Inc. can all be translated as “group”. They do not differ much in terms of form, legality, legal status or tax obligations. Both have the right to issue shares to the outside market to raise capital, in case the corporation goes bankrupt, the shareholders only need to repay the debt in the charter capital, not arrears to personal assets.

The only difference between them may be whether businesses choose whether they will be corporation or Inc. If an enterprise has chosen itself as a corporation, it must be written as “corporation” on the document, not changed to Inc. In contrast, corporate Inc. also cannot arbitrarily change to Corp on documents and papers. However, according to Vietnamese law, Corps in our country can use the alternative word “group” instead of the original word “corporation”.

Inc. what? Corporation and Inc. how different?

We will send you a few good examples of Inc. and corporations. Some large enterprises such as Samsung, Sony choose to form a corporation, so they are called “Samsung Corporation”, “Sony Corporation”. Others chose to become Inc. A super famous enterprise, Apple, also chooses this form, the full name of this corporation is Apple Inc.

Above are the things that News Timviec wants to share with you about the concept of corporation. You have understood what a corporation is, its advantages and disadvantages, its difference with Inc…. Hope these knowledge will help you a lot in work and life!