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What is the differences between corporation and company?
A company is a business organization which is associated with persons and set up with an aim of undertaking a business. It is governed by Companies Act 2103. Whereas a corporation is a corporate body registered outside or within a nation.
In simple words a company is suitable for small entities or businesses whereas a corporate is suitable for bigger entities or businesses.
Corporation
A corporation is a body which is incorporated inside or outside the country but excludes corporation sole or any corporation which is formed by official gazette notification by the central government.
Corporation is defined in Indian companies Act 2013, section 2(11) It is related to bigger entities or business. In this, there will be no single owner; its shareholders are their owners.
Corporation is divided in to two types as follows −
C-corporation − Taxes are paid based on their earnings.
S-corporation − Taxes are paid based on personal income tax of shareholders (as earnings sent to each shareholder).
Corporation has a separate legal entity and it can be sued or sued (in its name). In this there will be limited liability as members are limited to amounts held by unpaid shares. Capital of at least 5 crores and continued to exist. Tax is levied under income tax Act 1961.
Company
A company which is formed and registered under Indian companies Act 2013 or any other previous Acts. A company is defined in Indian companies act 2013, section 2 (20).
A company is formed by two or more voluntary associations which have common objectives and are treated as distinct legal personalities. Company can also sue or be sued under its own name.
The different types of companies are as follows −
- A company limited (by shares).
- LLC (limited Liability Company).
- A company limited (by guarantee).
- A company limited (both by shares and guarantee).
- Unlimited company.
Differences
The major differences between a corporation and a company are as follows −
| Corporation | Company |
|---|---|
| After the company is formed and registered. | Company is created and registered under Indian Companies Act, 2013. |
| Section 2 (11) of Companies Act, 2013. | Section 2 (20) of Indian Companies Act, 2013 |
| Incorporated inside and outside of India. | Incorporated within India. |
| Minimum 5 crores authorized capital. | Minimum authorized capital as per rules. |
| Wide scope. | Less scope when compared. |
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