Under Georgia law a Corporation is a separate legal entity. Generally it is a separate taxable entity but may make an election to have its income taxable to its owners. The owners of a Corporation are shareholders. Under Georgia law a Corporation has the power to enter into a contract, carry on a business, sue or be sued. The chief benefit of a corporation is that its shareholders are protected from liability for the obligations of corporation. They have limited liability. Exceptions exist if the shareholders guarantee Corporate debt or make an error that gives a creditor the right to “pierce the corporate veil” and hold shareholders liable. A Corporation’s life is perpetual, surviving the death or change of owners. Its life ends if it is liquidated or merged into another corporation. If the Corporation chooses to be a separate taxable entity it is known as a “C” Corporation. If it elects to have its shareholders bear the tax it is known as an “S” Corporation. In this event the Corporation files its own information tax return, but the tax is paid proportionately by the shareholders, avoiding double taxation.
Thomas E. Raines, PC represents clients throughout the Atlanta metro area: Fulton County, Cobb County, Clayton County, Dekalb County, Forsyth County, and Gwinnett County, including the cities of Norcross, Alpharetta, Roswell, Sandy Springs, Johns Creek, Marietta, Decatur, Lilburn, Lawrenceville, and Cumming. Contact Thomas E. Raines, PC today.