Features of a Corporation

A corporation is a legal entity distinct from its owners, offering several key features.

Let's consider Nike Inc. as an example.

One of the main features of such a corporation is limited liability. If Nike faces financial trouble, its investors only lose the money they have invested, not their personal assets like houses or savings.

This protects investors from the company's debts.

Another feature is perpetuity, which enables Nike to continue its operations indefinitely, even if its original owners or current shareholders pass away or sell their shares.

This ensures Nike can continue to grow and innovate over time in the sports and equipment industry.

Nike's ability to raise capital through stock sales enables it to finance expansions, research, and marketing without taking on expensive loans.

However, being a C corporation, Nike also faces double taxation, where its profits are taxed twice, first as corporate income and then as dividends to its shareholders.

The combined benefits of limited liability, perpetuity, and efficient capital raising help Nike remain strong and competitive in the global market.