Ark. Code R. 26-51-102 - 1(5) (1997) - Corporate Characteristics

The term "corporation" refers to an organization whose characteristics require it to be classified for purposes of taxation as a corporation rather than as another type of organization such as a partnership or a trust. There are a number of characteristics ordinarily found in a corporation which, when taken together, distinguish it from other organizations. These are:

(i) associates,

(ii) an objective to carry on business and divide the gains therefrom,

(iii) continuity of life,

(iv) centralization of management,

(v) liability for corporate debts limited to corporate property, and

(vi) free transferability of interests. Whether a particular organization is to be classified as a corporation must be determined by taking into account the presence or absence of each of these corporate characteristics. Other factors may be found in some cases which may be significant in classifying an organization as a corporation, a partnership, or a trust. An organization will be treated as a corporation if the corporate characteristics are such that the organization more nearly resembles a corporation than a partnership or trust.