Corporation vs Company – Difference and Comparison

What is Corporation?

A corporation is a business entity that is created to carry out a particular business activity. It is a legal entity, separate from its owners, with its own assets, liabilities, and legal obligations. Corporations are owned by shareholders, who have limited liability and are able to transfer their ownership interest in the corporation. A corporation’s main goal is to turn a profit.

Corporations are also able to reinvest their profits into expanding the business, buying new equipment, and hiring new employees. These reinvested profits also help create jobs and stimulate economic growth.

Furthermore, corporations are able to raise capital by selling shares of stock to investors. This helps to fund the corporation’s operations and growth. Corporations are able to benefit from certain tax advantages.

They offer a number of advantages to their owners, such as limited liability and the ability to raise capital. They also help to create jobs and stimulate economic growth. Lastly, corporations are able to benefit from certain tax advantages. For these reasons, corporations remain a popular form of business entity.

What is Company?

A company is an organization engaged in the production and sale of goods or services. The purpose of a company is to earn a profit by providing a product or service to its customers. Companies can range from small family businesses to large multinational corporations.

A company is composed of several departments, each responsible for a different aspect of the business. The departments can include sales, marketing, manufacturing, research and development, customer service, and finance. These departments are managed by a board of directors or a CEO.

The company is responsible for its own legal and financial obligations. This includes filing taxes, registering with the government, and ensuring that the company is compliant with any applicable laws and regulations.

Companies are also responsible for maintaining their financial records and for providing a safe and healthy working environment for their employees. There are various types of companies, including limited liability companies (LLCs), corporations, partnerships, sole proprietorships, and cooperatives. Each type of company has different legal and tax implications.

Difference Between Corporation and Company

  1. A corporation exists independently of its owners on a legal level, while a company does not have a separate legal entity from its owners.
  2. Corporations pay corporate taxes on their profits, while companies pay personal income taxes on their profits.
  3. Corporations must be formed in accordance with the laws of the state in which it is incorporated, while companies may be formed without the need to file any legal documents.
  4. Corporations can raise funds by selling stocks and bonds, while companies can only raise funds from personal investments.
  5. Shares of a corporation can be easily transferred, while shares of a company are not transferable.
  6. Corporations are much larger than companies.
  7. Corporations are subject to more regulations than companies.

Comparison Between Corporation and Company

Parameters of ComparisonCorporationCompany
OwnershipCorporations are owned by shareholdersOne or more individuals own a company
Legal statusA corporation is a separate legal entity from its ownersA company is considered a sole proprietorship or partnership depending on its ownership structure
LiabilityCorporations have limited liabilityThe company owners are personally liable for its debts and liabilities
ManagementCorporations are managed by its board of directors and officersCompany managed by its owners
LocationCorporations can be formed in any stateCompanies are restricted to the state in which it is formed


  1. The Demography of Corporations and Industries (
  2. The Oxford Handbook of Economic Geography – Google Books