The Corporation is the most complex and formal of the business entities. The Corporation was originally created to exist as a separate entity from its owners. In the eyes of the law, a Corporation is much like a person and can therefore enter into contracts, sue and be sued, and generally conduct business in its own name. In Maryland, a Corporation is formed when Articles of Incorporation are filed with SDAT. Its owners are called Stockholders or Shareholders. The document that governs how the business will be managed is called the Bylaws. Generally, a Corporation is managed by officers who are appointed by a Board of Directors. The Directors are elected by the Shareholders.

For tax purposes, C-Corps, Corporations that file under IRS subchapter C, are taxed at both the corporate and individual level. First, the Corporation must pay taxes on its profits. Then, when distributions are made to Shareholders, this money is taxed as personal income of the Shareholder. Some Corporations can elect to file taxes under IRS subchapter S. These are called S-Corps and are taxed like a partnership, only at the personal income level.