Corporations are legal entities that have their own legal personality.
They are often founded by several persons who participate in the company as partners. Examples of corporations in Austria are limited liability companies (GmbH) and public limited companies (AG).
Corporations are legally independent and have a legal entity, which is shaped by their executive bodies, such as the board of directors in the case of an AG. They own the company and can independently conclude contracts, acquire or sell property and sue for rights.
One advantage of corporations is that the liability of the shareholders is usually limited to their contribution. This means that the shareholders are not liable for the debts of the company, but only for the amount they have contributed as capital to the company. This is an important factor for investors who want to limit their risk.
Corporations also have tax advantages, as they are exempt from income tax liability for individuals. Instead, they are taxed on their profits.
