Difference Between Corporation and Company (With Table)

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

Corporation vs Company

The main 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

Parameter of comparison




A 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 entity

One type of a legal entity.

Exists only on paper, invisible legal entity.


C corporation and S corporation

Sole proprietorship, partnership, limited liability company, limited liability partnership or corporation.





Incorporated organization

Incorporated or corporate organization


Shareholder elect a director that runs and manages activities

Full 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. 


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.

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.


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.


  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/