Corporation vs. Individual — What's the Difference?
Edited by Tayyaba Rehman — By Maham Liaqat — Updated on May 2, 2024
A corporation is a legal entity separate from its owners with rights to own property and sue, while an individual refers to a single human being with personal legal responsibilities.
Difference Between Corporation and Individual
Table of Contents
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Key Differences
A corporation exists as a legal entity distinct from its owners, capable of owning assets, entering contracts, and being liable in lawsuits, which separates its responsibilities and liabilities from those of its shareholders. On the other hand, an individual is a single human being recognized by law as capable of rights and duties.
Corporations can continue indefinitely, as their existence is not dependent on the life of any particular member, manager, or employee. Whereas, the legal and financial identity of an individual ceases upon death, highlighting differences in continuity and succession.
In terms of taxation, corporations are subject to corporate taxes and can face double taxation—once on earnings and again when distributing dividends. Individuals are taxed on personal income, and tax rates can vary based on income levels and personal circumstances.
Corporations benefit from the ability to raise significant amounts of capital through the sale of stock to the public. In contrast, individuals must rely on personal assets or loans for funding, limiting their capacity to generate capital.
Ownership in a corporation is typically represented by shares, which can be freely transferred, making it easier to transfer ownership and attract investors. Individuals own assets directly and any transfer of ownership involves personal transactions.
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Comparison Chart
Legal entity
Yes, separate from its owners.
No, the individual is the entity.
Lifespan
Potentially indefinite.
Ends with death or declaration of death.
Taxation
Subject to corporate tax, possible double taxation.
Subject to personal income tax.
Capital acquisition
Can issue shares to raise funds.
Depends on personal assets or loans.
Ownership transfer
Shares can be easily transferred.
Direct transfer of personal assets.
Compare with Definitions
Corporation
A legal entity recognized by law as having a separate identity from its owners.
Google Inc. operates globally, distinct from its shareholders.
Individual
Does not have perpetual succession; legal identity ceases upon death.
His estate was handled by the probate court post-mortem.
Corporation
Bound by its own set of regulations and corporate governance.
The corporation adheres to strict financial reporting laws.
Individual
Personally liable for debts and legal actions.
He was held liable for the damages in court.
Corporation
Can sue or be sued in its own name.
The corporation was sued for breach of contract.
Individual
Ownership of assets is direct and personal.
He owns a car and a house.
Corporation
May offer shares to the public to raise capital.
The corporation went public to raise funds for expansion.
Individual
An individual is that which exists as a distinct entity. Individuality (or self-hood) is the state or quality of being an individual; particularly (in the case of humans) of being a person unique from other people and possessing one's own needs or goals, rights and responsibilities.
Corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and recognized as such in law for certain purposes. Early incorporated entities were established by charter (i.e.
Individual
Single; separate
Individual tiny flowers
Corporation
An entity such as a business, municipality, or organization, that involves more than one person but that has met the legal requirements to operate as a single person, so that it may enter into contracts and engage in transactions under its own identity.
Individual
Of or for a particular person
The individual needs of the children
Corporation
Such a body created for purposes of government. Also called body corporate.
Individual
A single human being as distinct from a group
Boat trips for parties and individuals
Corporation
A group of people combined into or acting as one body.
Individual
Of or relating to an individual, especially a single human
Individual consciousness.
Corporation
(Informal) A protruding abdominal region; a potbelly.
Individual
By or for one person
Individual work.
An individual portion.
Corporation
A body corporate, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.
Individual
Existing as a distinct entity; separate
Individual drops of rain.
Corporation
The municipal governing body of a borough or city.
Individual
Marked by or expressing individuality; distinctive or individualistic
An individual way of dressing.
Corporation
(historical) In Fascist Italy, a joint association of employers' and workers' representatives.
Individual
Special; particular
Each variety of melon has its individual flavor and texture.
Corporation
A protruding belly (perhaps a play on the word corpulence).
Individual
Serving to identify or set apart
"There was nothing individual about him except a deep scar ... across his right cheek" (Rebecca West).
Corporation
A body politic or corporate, formed and authorized by law to act as a single person, and endowed by law with the capacity of succession; a society having the capacity of transacting business as an individual.
Individual
A single human considered apart from a society or community
The rights of the individual.
Corporation
A business firm whose articles of incorporation have been approved in some state
Individual
A human regarded as a distinctive or unique personality
Always treated her clients as individuals.
Felt he was quite an individual.
Corporation
Slang terms for a paunch
Individual
A single organism as distinguished from a species, community, or group.
Corporation
Has perpetual succession, meaning it can outlive its founders.
The corporation remained operational even after its founder’s death.
Individual
A member of a collection or set; a specimen.
Individual
A person considered alone, rather than as belonging to a group of people.
He is an unusual individual.
Individual
(legal) A single physical human being as a legal subject, as opposed to a legal person such as a corporation.
Individual
An object, be it a thing or an agent, as contrasted to a class.
Individual
(statistics) An element belonging to a population.
Individual
Relating to a single person or thing as opposed to more than one.
As we can't print them all together, the individual pages will have to be printed one by one.
Individual
Intended for a single person as opposed to more than one person.
Individual personal pension; individual cream cakes
Individual
Not divisible without losing its identity.
Individual
Not divided, or not to be divided; existing as one entity, or distinct being or object; single; one; as, an individual man, animal, or city.
Mind has a being of its own, distinct from that of all other things, and is pure, unmingled, individual substance.
United as one individual soul.
Individual
Of or pertaining to one only; peculiar to, or characteristic of, a single person or thing; distinctive; as, individual traits of character; individual exertions; individual peculiarities.
Individual
A single person, animal, or thing of any kind; a thing or being incapable of separation or division, without losing its identity; especially, a human being; a person.
An object which is in the strict and primary sense one, and can not be logically divided, is called an individual.
That individuals die, his will ordains.
Individual
An independent, or partially independent, zooid of a compound animal.
Individual
A human being;
There was too much for one person to do
Individual
A single organism
Individual
Being or characteristic of a single thing or person;
Individual drops of rain
Please mark the individual pages
They went their individual ways
Individual
Separate and distinct from others of the same kind;
Mark the individual pages
On a case-by-case basis
Individual
Characteristic of or meant for a single person or thing;
An individual serving
Separate rooms
Single occupancy
A single bed
Individual
Concerning one person exclusively;
We all have individual cars
Each room has a private bath
Individual
A single human being as recognized by law.
She purchased a new home in her own name.
Individual
Raises funds based on personal credit or assets.
She obtained a personal loan to start her business.
Common Curiosities
How do corporations raise capital compared to individuals?
Corporations can issue stock to raise capital, while individuals rely on personal assets or loans.
What happens to the ownership in a corporation when an owner dies?
Ownership through shares can be transferred to heirs or sold, separate from the death of an owner.
Can a corporation continue indefinitely?
Yes, a corporation has perpetual succession, unlike an individual whose legal identity ends with death.
How is ownership structured in a corporation versus for an individual?
In a corporation, ownership is structured through shareholding, allowing for multiple partial owners and easy transferability. For an individual, ownership is direct and personal assets are non-transferable without explicit transactions.
What is the primary legal difference between a corporation and an individual?
A corporation is a separate legal entity from its owners, while an individual is the entity itself.
What legal actions can a corporation and an individual undertake?
A corporation can sue, be sued, and enter into contracts in its own name, separate from its owners. An individual also has the legal capacity to sue, be sued, and make contracts, but these actions are personally tied to them.
How do corporations handle management compared to individuals?
Corporations are managed by a board of directors and executive officers, which is separate from ownership. Individuals manage their affairs personally or with appointed agents.
Can a corporation's existence be terminated?
Yes, though it has perpetual succession, a corporation’s existence can be terminated by dissolution, either voluntarily or by regulatory action. An individual’s legal existence ends with their death.
How does taxation differ for corporations and individuals?
Corporations are taxed on profits and might face double taxation, whereas individuals are taxed on personal income.
What are the benefits of being a corporation?
Corporations benefit from limited liability, potential for large-scale capital accumulation, and longevity beyond the lives of its founders.
How does the law treat corporations compared to individuals in terms of rights?
The law treats corporations as separate legal persons with rights similar to individuals, but tailored to suit collective entities.
How do responsibilities differ between a corporation and an individual?
Corporations have responsibilities to shareholders, regulatory bodies, and other stakeholders, managed under corporate governance. Individuals are responsible for their actions and obligations under personal law.
What are the drawbacks of corporate structure?
The corporate structure can involve complex regulations, potential for double taxation, and a more impersonal approach to management.
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Written by
Maham Liaqat
Edited by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
