Finance: What is a Corporation?

What is a corporation? Corporations are legal bodies. Bodies exist in various forms: LLC (Limited Liability Corporation), S-Corporation (now with pass-through tax treatment...think: accountants' partnership), and C-Corporation (which is how most of the big guys are set up).

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Transcript

00:29

things that the company she works for does let's say you want to set up your [mime artists at the window of a shop]

00:34

own mime training studio brother can you spare a mime, but then you hit a wall

00:39

one of your mime trainees becomes badly injured while trying to get out of a [mime trainee gets injured while attempting to get out of a glass box]

00:43

glass box and you get sued you lose..wow you're totally speechless so your

00:50

corporation which was basically just you ten grand in the bank and a hat rack [Laptop showing $10.000 in the bank beside a hatrack]

00:55

full of berets well it loses everything you turn over your 10k to the sue-er

01:01

the one who sued you and you dust off your hands and move on try new venture [mime dusts off hands]

01:06

tapping into your prior experience as a mime therapist well legally the guy who

01:11

sued you while working for the corporation can't sue you personally

01:15

your $350,000 home is untouchable yeah who knew miming paid so well same deal [Mimes $350,000 home]

01:22

on that untouchable-ness of your Prius and the untouchable-ness of your

01:26

collection of invisible ropes, the legal body of the corporation threw itself on [Mime pretending to move along an invisible rope]

01:30

the landmine of your lawsuit and took the blow while you just walked away [Mime artist moon-walking off stage]