From Corporation

When compared to a sole proprietorship or a partnership, a corporation is a legal organization that is treated in a manner very similar to that of an individual. Additionally, a corporation is held by individual investors, each of whom has restricted accountability for the firm’s liabilities.

The United States government, under the leadership of President Herbert Hoover, established the Reconstruction Finance Corporation (RFC) as a national loaning agency in the early 1930s. The RFC’s mission was to save banks that were on the verge of failing and to restore Americans’ faith in the nation’s financial system, all while reducing the effects of the Great Depression. The Reconstruction Finance Corporation was finally able to expand its scope to the point where it could finance agrarian, industrial, and manufacturing undertakings through the provision of loans totaling billions of dollars until its dissolution in 1957. It was a substantial contributor to the finance of New Deal programs that were implemented by President Franklin Delano Roosevelt in order to assist the United States in recovering from its worst economic meltdown.

According to the regulations of the IRS, the C corporation is the type of corporation that is considered the norm (or default). The S corporation is a type of corporation that voluntarily changed its tax status with the Internal Revenue Service in order to take advantage of certain favorable tax provisions. Both of these organizational forms acquire their names from the sections of the Internal Revenue Code (IRC) that govern how they are subject to taxation.

It is not the proprietors of a corporation who are personally accountable for the debts of the company.