Difference Between Corporation and Company (With Table)

Corporation vs Company

In the business world, both the words ‘company’ and ‘corporate’ has come to mean the same.

The key difference between company and corporate is that a company is a form of business that is suitable for small businesses and entities; whereas, corporate means a form of business that is suitable for bigger businesses and entities.

The owner of a company is its owners but on the other hand, the owners of a corporation are the shareholders. A corporation is always a company but a company may not be a corporation.


Comparison Table Between Corporation and Company (in Tabular Form)

Parameter of comparisonCorporationCompany
DefinitionA corporate is a company that is for large businesses who is owned by shareholders.A company is a body corporate or an incorporated business organization registered under the companies act.
Legal entityOne type of a legal entity.Exists only on paper, invisible legal entity.
TypesC corporation and S corporationSole proprietorship, partnership, limited liability company, limited liability partnership or corporation.
OwnersShareholders Members 
organizationIncorporated organizationIncorporated or corporate organization
managementShareholder elect a director that runs and manages activitiesFull control


What is a Corporation?

Corporate is a company that is related to larger businesses and entities. There is no single owner, the shareholders are the owners.

The shareholders elect a director and the director runs and manages the duties. A corporation is a type of legal entity. There are two types of the corporation: C Corporation and S Corporation.

The difference is how they are perceived by the federal and state income tax. In a C corporation, the taxes are directly paid by the company based on its earnings.

In S corporation, the earnings are sent to each shareholder and the taxes are paid through their personal income tax. Corporations are always incorporated.

A corporation always has the abbreviation of ‘Inc’ in its legal documents. A corporation always has to be ‘Inc’ or ‘limited’ for it to be recognized as a legal entity.

If a shareholder leaves his stake on the company then his absence doesn’t change the running of the company unless he owns a lot of shares. His shares are then bought by others or a new shareholder.

The corporation is usually more structured and organized than the company. The management doesn’t interfere in the day to day activities of the business.

The corporation has both a social profit as well as a capital profit motto. Corporate observes more professionals as it is bigger than a company. The corporation has several and separate departments for all the tasks and employees. 

Types of corporations

What is a Company?

A company is a business related to a small business or entity. The owners of a company are its members. The company is a less structured and complex organization than a corporation. A company is usually an invisible legal entity that only exists on a paper.

The company can be either incorporated or corporate. The company doesn’t have a strict department and management. The employees report to the seniors and executive officers.

The owners interfere and help to run daily tasks and business in general. The employees are professionals as well as fresher and beginners.

The company has a semi-formal relation between the management and the employees. There are many types of a company like a sole proprietorship, partnership, Limited Liability Company, limited liability partnership or corporation.

Difference Between Public Sector and Public Limited Company (With Table)

I. Sole proprietorship – The sole proprietorship is also called as a single owner business. It is run by a single person. There is no distinction between the owner and the business entity. The sole person owns the business. 

Ii. Partnership – Partnership is wherein two or more partners come together to run a business for mutual interests in the profits. The partnership can be between two or more individuals, businesses, social clubs or government, etc.

Iii. Limited Liability Company – This structure exists in the US. it is a private limited company. The business combines the taxes between two partners or sole proprietorship with the limited liability of a corporation.

Iv. Limited Liability Partnership – In this business structure, the two o more partners have limited liabilities. It can have the role of both partnerships as well as a corporation. The highlight of the LLP is that none of the partners are responsible for the misbehavior and misconduct of the other partner.


Main Differences Between Corporation and Company

  1. The main difference between corporations and companies is the size. The corporation is a big business or entity whereas the company is a small business or entity.
  2. The owners of a corporation are the shareholders whereas the owner of the company is its members.
  3. The corporation is a legal entity but the company is an invisible legal entity that exists only on a paper.
  4. The corporation is more structured and complex than a company.
  5. The management and owners don’t interfere in the daily functions of the business in the corporation but on the other hand, the company owners interfere and run the daily tasks of the business.
  6. There are more professionals observed in the corporation as employees than the company.
  7. The types of corporations are C Corporation and S Corporation and the types of companies are sole proprietorship, partnership, limited liability corporation, limited liability partnership, and corporation.
  8. The corporation could only be incorporated but the company can be both incorporated and corporate.


Frequently Asked Questions (FAQ) About Corporation and Company

  1. What is the purpose of a corporation?

    The main purpose of a corporation is to ensure the collection of money from investors like creditors and shareholders.

    This, after the collection of the money they ensure that the profits are being generated and also ensuring that the money invested by the different investors is increasing and they are getting constant Returns.

  2. Does a corporation have an unlimited life?

    According to the corporation code which was established in the year 1980, it allows the corporations to exist for a period of about 50 years from the date of the Inception of that cooperation.

    The period for this can also be extended but this can only be done within the 5 years of the original expiration date.

  3. Who controls a corporation?

    A corporation is mainly controlled by the board of directors as they approve the major business decisions. A director can also be the shareholder of the company.

    Going by the theory of corporation is controlled by its members who are also the owner.

  4. Who are the true owners of a corporation?

    The true owners of a corporation are the shareholders or the stockholders as they have the ultimate ownership in terms of the company size.

    They have all the right to elect the directors and also vote on the major corporate decisions which need to be taken in favor of the company.

  5. What is a company and the types of companies?

    The company is a corporate body or can also be an incorporated business organization that is registered under the Companies Act of India. It can be unlimited or a limited company, private or a public company and can also be a community interest company.

    The most common types of companies are limited liability company, general partnership, sole proprietorship, estate or an association.

  6. How the company is formed?

    In India, the companies are formed under the ROC, which is the registrar of Companies. This body approves all the required documentation for forming a company and gives the tag of LLP or private limited company to them.

    Also, the private limited companies are governed and maintained under the Companies Act of 2013.

  7. What do you mean by a public company?

    A public company is a company that has sold a portion of itself to the public with the means of initial public offering or IPO. The advantage of such a company is that it can tap the financial markets by selling the bonds or the stock and can easily expand on other projects.

Difference Between BPO and KPO (With Table)



Though the words in today’s day and age have come to mean the same there are a few changes.

Both the company and corporation though are interdependent. The company can grow to be a big corporation and the big corporations need a small scale business for them to develop their business.

In economics, everything is connected and is liable to each other. The company though small plays a significant role and so does the corporation.

A corporation is always a company but the company may or may not be a corporation.


Word Cloud for Difference Between Corporation and Company

The following is a collection of the most used terms in this article on Corporation and Company. This should help in recalling related terms as used in this article at a later stage for you.

Corporation and Company
Word Cloud for Corporation and Company



  1. https://corporate.findlaw.com/corporate-governance/types-of-corporations.html
  2. https://corporations.uslegal.com/types-of-corporation/
  3. https://www.feedough.com/what-is-a-company-meaning-types-features-of-a-company/