It’s important to grasp general legal concepts and definitions as a startup founder. This page is sourced from Clerky’s Legal Concepts for Founders page.
In normal speech, person is generally synonymous with human. In law, however, a human is only one type of person. The law defines other types of legal people (also referred to as legal persons) that humans (also known as natural people or natural persons) can create.
A corporation is one type of legal person that humans can create. By allowing corporations to be considered legal people, the law makes it possible for them to hold legal rights and obligations separate from their owners.
Each state has its own rules about how to form a corporation. In Delaware, people form corporations by filing a document known as a certificate of incorporation with the Delaware Secretary of State.Once the filing has been accepted by the Delaware Secretary of State, the corporation comes into existence as a legal person.
What is the difference between a corporation and a company?
A corporation is a type of company. Company is a generic term used to refer to a business, and does not imply any specific type of legal entity.