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A corporation is a union of natural persons that has its own legal status that is independent from the persons involved. It is a "creature" of statute; i.e., it is like a person created by law. Because it is recognized by governments as such (as a separate creature) it must file tax returns and pay taxes and conform to state and federal law. This separation of persons and corporation gives it special powers. Its status and capacity is determined by the law of the place of incorporation.
Investors and entrepreneurs often form joint stock companies to make a business easier. Therefore the term corporation often means such business corporations. Corporations may also be formed for local government (municipal corporation), policial, religious, and charitable purposes (not-for-profit corporation), or government programs (government-owned corporation).
In common speech, the word "corporation" refers usually to limited responsibility corporation. That is a business firm where each of the partners invest a sum of money in as the capital of the corporation. They receive shares as recognition of the sum they have invested. If the company goes bankrupt, the business partners are responsible of only the name value of their shares, not their whole own personal property, of the company's debts.