Association vs. Corporation — What's the Difference?
By Tayyaba Rehman — Updated on September 17, 2023
An association is a group of individuals united for a common purpose, while a corporation is a legal entity formed to conduct business and recognized as separate from its owners.
Difference Between Association and Corporation
Table of Contents
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Key Differences
Association and Corporation are terms that describe groups or bodies with distinct purposes and structures. An association typically refers to an organization or a group of individuals who come together due to shared interests or objectives. On the other hand, a corporation stands as a legal entity distinct from its owners, primarily established to conduct business.
Associations are often non-profit entities and can range from professional organizations to community groups. They focus on mutual objectives and promote shared interests. Conversely, a corporation can be established with the intent of generating profit, and it offers limited liability to its shareholders or owners.
When considering ownership and liability, there's a stark difference between an association and a corporation. Members of an association do not possess ownership in the entity, nor are they directly liable for its actions. In contrast, a corporation’s owners or shareholders possess stakes in the entity and enjoy limited liability, meaning they're not personally responsible for corporate debts.
Another key distinction lies in governance. Associations are usually governed by members or a board chosen by members. Corporations are governed by a board of directors elected by shareholders. This board makes significant decisions, ensuring the corporation's goals align with the shareholders' interests.
In summary, while both association and corporation involve groups with shared goals, their structures, purposes, and legal definitions diverge significantly.
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Comparison Chart
Definition
Group united by a shared interest.
Legal entity for conducting business.
Profit Orientation
Typically non-profit.
Can be for-profit.
Ownership & Liability
Members don’t have ownership; usually no direct liability.
Shareholders have ownership; limited liability.
Purpose
Promote shared interests.
Conduct business and possibly generate profit.
Governance
Governed by members/board chosen by members.
Governed by a board of directors chosen by shareholders.
Compare with Definitions
Association
The act of associating or being connected.
The association of these events is no mere coincidence.
Corporation
An entity that can own property, pay taxes, and enter contracts.
The corporation purchased the land for development.
Association
A group of individuals united by common interests.
The Writers' Association meets monthly.
Corporation
A business that can be for-profit or non-profit.
The corporation announced its charity initiatives for the year.
Association
A mental connection of ideas or things.
There's a strong association between rain and sadness in literature.
Corporation
A group authorized to act as a single entity.
The Corporation of London oversees city functions.
Association
A group organized for a specific purpose or activity.
The Residents' Association has planned a community picnic.
Corporation
A business entity recognized as distinct from its owners.
The corporation has global branches.
Association
The act of associating or being connected with
My parents disapproved of my association with my friends from across town.
Corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and recognized as such in law for certain purposes. Early incorporated entities were established by charter (i.e.
Association
An organized body of people who have an interest, activity, or purpose in common; a society.
Corporation
An entity such as a business, municipality, or organization, that involves more than one person but that has met the legal requirements to operate as a single person, so that it may enter into contracts and engage in transactions under its own identity.
Association
A mental connection or relation between thoughts, feelings, ideas, or sensations
My therapist helped me examine my association of food with comfort.
Corporation
Such a body created for purposes of government. Also called body corporate.
Association
The act of expressing a link or connection between two things
"The media's association of visa overstayers with illegality is so strong and common as to shape public attitudes towards them" (Junya Morooka).
Corporation
A group of people combined into or acting as one body.
Association
A correlation or causal connection
There is a definite association of exercise with improved health.
Corporation
(Informal) A protruding abdominal region; a potbelly.
Association
(Chemistry) Any of various processes of combination, such as hydration, solvation, or complex-ion formation, depending on relatively weak chemical bonding.
Corporation
A body corporate, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.
Association
(Ecology) A large number of organisms in a specific geographic area constituting a community with one or two dominant species.
Corporation
The municipal governing body of a borough or city.
Association
(uncountable) The act of associating.
Corporation
(historical) In Fascist Italy, a joint association of employers' and workers' representatives.
Association
(countable) The state of being associated; a connection to or an affiliation with something.
Corporation
A protruding belly (perhaps a play on the word corpulence).
Association
(statistics) Any relationship between two measured quantities that renders them statistically dependent (but not necessarily causal or a correlation).
Corporation
A body politic or corporate, formed and authorized by law to act as a single person, and endowed by law with the capacity of succession; a society having the capacity of transacting business as an individual.
Association
A group of persons associated for a common purpose; an organization; society.
Corporation
A business firm whose articles of incorporation have been approved in some state
Association
(object-oriented programming) Relationship between classes of objects that allows one object instance to cause another to perform an action on its behalf.
Corporation
Slang terms for a paunch
Association
A benevolent overseas Chinese organization of popular origin for overseas Chinese individuals with the same surname or trade or business.
Corporation
An entity offering limited liability to its shareholders.
Investors are protected in the corporation by limited liability.
Association
The act of associating, or state of being associated; union; connection, whether of persons of things.
Self-denial is a kind of holy association with God.
Association
Mental connection, or that which is mentally linked or associated with a thing.
Words . . . must owe their powers association.
Why should . . . the holiest words, with all their venerable associations, be profaned?
Association
Union of persons in a company or society for some particular purpose; as, the American Association for the Advancement of Science; a benevolent association. Specifically, as among the Congregationalists, a society, consisting of a number of ministers, generally the pastors of neighboring churches, united for promoting the interests of religion and the harmony of the churches.
Association
A formal organization of people or groups of people;
He joined the Modern Language Association
Association
The act of consorting with or joining with others;
You cannot be convicted of criminal guilt by association
Association
The state of being connected together as in memory or imagination;
His association of his father with being beaten was too strong to break
Association
A social or business relationship;
A valuable financial affiliation
He was sorry he had to sever his ties with other members of the team
Many close associations with England
Association
The process of bringing ideas or events together in memory or imagination;
Conditioning is a form of learning by association
Association
A relation resulting from interaction or dependence;
Flints were found in association with the prehistoric remains of the bear
The host is not always injured by association with a parasite
Association
(chemistry) any process of combination (especially in solution) that depends on relatively weak chemical bonding
Association
(ecology) a group of organisms (plants and animals) that live together in a certain geographical region and constitute a community with a few dominant species
Association
A connection or cooperative link between people or organizations.
The association between the two companies has been beneficial.
Common Curiosities
What is an Association's primary purpose?
An Association usually promotes shared interests or objectives.
Can an Association engage in business activities?
While an Association can have business activities, its primary focus is usually on mutual interests, not profit.
Is a Corporation's main goal always profit?
No, there are non-profit corporations focused on charitable or educational goals.
How is a Corporation different from a sole proprietorship?
A Corporation is a separate legal entity with limited liability, while a sole proprietorship is not distinct from its owner.
What is the liability of a shareholder in a Corporation?
Shareholders have limited liability and aren't personally responsible for corporate debts.
Can an Association become a Corporation?
With the right legal procedures, an association can incorporate, becoming a corporation.
How do members benefit from an Association?
Members benefit through shared resources, networking, and collective advocacy.
Who can join an Association?
Membership criteria vary, but individuals with shared interests or objectives usually can join.
Who governs a Corporation?
A Corporation is governed by a board of directors elected by shareholders.
Are all Associations non-profit?
While many are, not all associations are non-profit; some may have business objectives.
Why might someone start a Corporation?
Reasons include limited liability, tax benefits, and structured governance.
How are decisions made in an Association?
Decisions are typically made by members or a board chosen by members.
Are membership fees common in Associations?
Yes, many associations charge membership fees to support their activities.
What legal formalities are needed to start a Corporation?
This varies by jurisdiction but often includes registration, bylaws, and a board of directors.
Do Corporations have a perpetual existence?
Typically, yes. A Corporation continues to exist even if owners or shareholders change.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
