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An entity such as a corporation, government agency, or even an individual that becomes legally incorporated under some name is known as a body corporate. Another term that identifies such an entity is a corporation. The terms used to illustrate the type of entity that exists are used in legal and business situations and may determine factors such as the tax status of a business. Also, this corporation may include a housing or office complex where there are multiple owners.
Different tax requirements are applied to an organization based on the makeup of the entity. A nonprofit organization, for instance, is likely to receive certain tax benefits from a government because of the nature of the entity. In the case of a body corporate, this business entity should expect to be subject to tax laws in a country. There is likely some tax rate expressed as a percentage by which the entity will be charged annually by a federal government. Laws dictate what type of income earned by a body corporate is taxable.
In the U.K., for instance, the principle of mutuality applies to a body corporate. As a result, the entity cannot expect to generate a stream of profits from its owners. Instead, profits should be earned by customers, clients, and outside members, although the type of commerce that can occur in this type of entity is limited. Any profits earned on behalf of a body corporate by nonowners becomes taxable income. Income that is earned at a body corporate via personal property that is owned by proprietors, such as money paid in laundry machines, is subject to tax.
In real estate, a subdivision of property where there are individuals who live or work near one another constitutes a body corporate. Owners of the properties typically meet during scheduled gatherings to make decisions on behalf of the legal entity. Some issues that can be discussed may surround the property itself or the individuals who occupy the buildings.
The owners of the corporation are responsible for enforcing rules in addition to maintenance on a property. Any upkeep that must be performed is possible through owner monies that are paid into a fund and distributed on an as-needed basis. Members may need to become part of an internal committee in order to influence the direction of these payments. These participants together shape the environment in which residents live and work each day so that no one individual is responsible for management of the property.