A corporation is a business entity in which the shareholders are sheltered from the liabilities of the corporation.   Shareholders are personally liable for the corporate debts only to the extent of her capital contributions to the corporation.  Shareholders are usually not allowed to participate in the management of the company.   Also, the profits of corporations are usually taxed twice before they actually reach the shareholders---- first upon realization by the corporation (at the federal corporate rate), and secondarily (at the federal individual rate) upon distribution to the shareholders.