Ohio Corporations

A business is a legal entity in which people operate together. In a normal business, individuals work with others to create and sell goods or services. Others simply purchase the goods and services from the business owner. The owner is usually the person who finances the business. Then, a business can make a profit for the goods and services it sells. But if the business operates like a sole proprietorship, the owner and only that person (the owner) are legally responsible for all debts, liabilities and responsibilities arising from the business.

A corporation is not a business in the usual sense of the word. A business would be required to file reports with the state and to have corporate taxes at the same time. However, corporations are separate legal entities from the owners and officers of the corporations. Although some states allow some limited liability partnerships, there is no requirement in Ohio for corporations.

There are certain distinguishing factors between a sole proprietorship and a corporation. For instance, in a sole proprietorship, the profits are always shared by the owners with no one else. In a corporation, all profits are divided among the corporation’s stockholders. And, although the corporate shield protects the shareholders from personal liability, corporations are held responsible for debts, lawsuits and for malpractice.