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At one time, there were only three options for company organizers choosing a form of business organization: the sole proprietorship, the partnership and the corporation.Then in the 1970s, the limited liability company (LLC) was introduced in some states.

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Corporations are the most widely known business forms, providing limited liability to shareholders and allowing ownership to be freely transferred through the buying and selling of stock.

C corporations are also subject to what is known as "double taxation." This type of tax treatment means that income and gains on property are taxed first at the corporate level and then again at the individual shareholder level for any dividends received.

When a corporation ceases its business operations, all assets owned by the company must be distributed.

This process is known as liquidation and is necessary, even in cases when the corporation is being sold or converted into a different business structure.

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