Director and Shareholder

Director and Shareholder Liability: While the general rule is limited

liability, there are situations where directors and even shareholders of a

corporation could be held personally liable for certain acts or failures of the

corporation. There are many statutes that created personal liability on the part

of directors and even shareholders. Also, the directors or shareholders might

engage in activities, or fail to take certain steps, that could create personal

liability. Without proper legal advice on the activities of a corporation, the

benefits of using a corporation to conduct business could be lost.( Business and

Politics P.23-26)

Overall The biggest disadvantage of a corporation is that corporations are subject

to taxes. Corporations are not like proprietorship and partnership forms of

organization, they must pay federal income taxes. Also, stockholders must pay

income taxes on any dividends distributed to them. So, all the corporations are

being tax twice and it is what is call double taxation.

In my view why lots of companies like Corporation, the most important reason

must be when the company was breaking or can counting to business. If the

company is a Corporation , it cannot pay all the money for shareholders because

it is broke, and then the government will help them to solve that. So that lots of

people will choose corporation to start with business.

However, in A fundamental tenet of corporate law is that a business corporation

is organized and carried on for the benefit of its stockholders. In recent times,

an increasing number of for-profit organizations have formed in order to pursue

social and environmental goals. There is a growing investor movement toward

the financial support of organizations that have social benefit purposes at the

center of their existence. However, it may be difficult for directors and officers of

these organizations to pursue these social purposes without running afoul of

traditional fiduciary duties requiring corporate managers to maximize