A corporation is a legal personality, usually used to conduct business. Note This Wikipedia entry deals with the legal concept legal person. Corporations exist as a product of corporate law, and their rules balance the interests of the shareholders that invest their capital and the employees who contribute their labour. Corporate law (also "company" or "corporations" law is the Law of the most dominant kind of business enterprise in the modern world A mutual shareholder or stockholder is an Individual or company (including a Corporation) that legally owns one or more shares of People work together in corporations to produce. In modern times, corporations have become an increasingly dominant part of economic life. People rely on corporations for employment, for their goods and services, for the value of the pensions, for economic growth and social development. Employment is a Contract between two parties, one being the employer and the other being the employee. Economic growth is the increase in the amount of the goods and services produced by an economy over time

The defining feature of a corporation is its legal independence from the people who create it. If a corporation goes bust, shareholders will lose their money, and employees will lose their jobs, but neither will be liable for debts that remain owing to the corporation's creditors. This rule is called limited liability, and it is why corporations end with "Ltd." (or some variant like "Inc." and "plc"). Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership A private company limited by shares is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries In the words of British judge, Walton J, a company is. . .

". . . only a juristic figment of the imagination, lacking both a body to be kicked and a soul to be damned. Imagination is the ability to form Mental images/sounds/feelings or the ability to Spontaneously Generate images/sounds/feelings within one's own Mind The soul, according to many religious and philosophical beliefs is the self-awareness, or Consciousness, unique to a particular living "^[1]

But despite this, corporations are recognised by the law to have rights and responsibilities like actual people. Corporations can exercise human rights against real individuals and the state,^[2] and they may be responsible for human rights violations. Human rights refers to the "basic Rights and freedoms to which all humans are entitled ^[3] Just as they are "born" into existence through its members obtaining a certificate of incorporation, they can "die" when they lose money into insolvency. A certificate of incorporation is a legal document relating to the formation of a company or Corporation. Insolvency means the inability to pay one's debts This is defined in two different waysCash flow insolvency unable to pay debts as they fall dueBalance sheet insolvency Corporations can even be convicted of criminal offences, such as fraud and manslaughter. In the broadest sense a fraud is a Deception made for personal gain or to damage another individual Manslaughter is a legal term for the killing of a human being in a manner considered by law as less culpable than Murder. ^[4] Five common characteristics of the modern corporation, according to Harvard University Professors Hansmann and Kraakman are. . .

• separate legal personality of the corporation (the right to sue and be sued in its own name)
• limited liability of the shareholders (so that when the company is insolvent, they only owe the money that they subscribed for in shares)
• transferrable shares (usually on a listed exchange, such as the London Stock Exchange, New York Stock Exchange or Euronext in Paris)
• delegated management, in other words, control of the company placed in the hands of a board of directors
• investor ownership, which Hansmann and Kraakman take to mean, ownership by shareholders. Note This Wikipedia entry deals with the legal concept legal person. Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock The London Stock Exchange or LSE is a Stock exchange located in London, England. The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. Euronext NV is a pan- European Stock exchange based in Paris and with subsidiaries in Belgium, France, Netherlands Paris (ˈpærɨs in English; in French) is the Capital of France and the country's largest city Delegation (also called deputation) is the assignment of authority and responsibility to another person (normally from a manager to a subordinate to carry out specific activities Ownership is the state or fact of exclusive rights and control over Property, which may be an object, land/real estate, Intellectual property ^[5]

Ownership of a corporation is complicated by increasing social and economic interdependence, as different stakeholders compete to have a say in corporate affairs. In most developed countries excluding the English speaking world, company boards have representatives of both shareholders and employees to "codetermine" company strategy. Co-determination (also codetermination is a practice whereby the employees have a role in management of a company Calls for increasing corporate social responsibility are made by consumer, environmental and human rights activists, and this has led to larger corporations drawing up codes of conduct. Corporate social responsibility (CSR also called corporate responsibility corporate citizenship responsible business and corporate social opportunity is a concept whereby Organizations In Australia, Canada, the United Kingdom and the United States, corporate law has not yet stepped into that field, and its building blocks remain the study of corporate governance and corporate finance. For a topic outline on this subject see List of basic Australia topics. Country to "Dominion of Canada" or "Canadian Federation" or anything else please read the Talk Page The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The United States of America —commonly referred to as the Corporate law (also "company" or "corporations" law is the Law of the most dominant kind of business enterprise in the modern world Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled Corporate finance is an area of Finance dealing with the financial decisions Corporations make and the tools and analysis used to make these decisions

Corporations' history

1/8 share of the Stora Kopparberg mine, dated June 16, 1288. Stora Enso Oyj () is a Finnish &ndash Swedish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Events 1487 - Battle of Stoke Field, the last dying breath of the Wars of the Roses.

The word "corporation" derives from corpus, the Latin word for body, or a "body of people". Latin ( lingua Latīna, laˈtiːna is an Italic language, historically spoken in Latium and Ancient Rome. Entities which carried on business and were the subjects of legal rights were found in ancient Rome, ancient India and the Maurya Empire. The Maurya Empire ( 322 – 185 BCE) ruled by the Mauryan dynasty was a geographically extensive and powerful political and military ^[6] In mediaeval Europe, churches became incorporated, as did local governments, such as the Pope and the City of London Corporation. History See also History of the Papacy Catholics recognize the Pope as a successor to Saint Peter, who Jesus named as the "shepherd" and The City of London Corporation (formerly known as the Corporation of London)is the municipal governing body of the City of London. The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity. The alleged oldest commercial corporation in the world, the Stora Kopparberg mining community in Falun, Sweden, obtained a charter from King Magnus Eriksson in 1347. Stora Enso Oyj () is a Finnish &ndash Swedish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Falun (ˈfɑːlʉn is a city in Dalarna, central Sweden, the seat of Falun Municipality and the capital of Dalarna County "Sverige" redirects here For other uses see Sweden (disambiguation and Sverige (disambiguation. A charter is the grant of authority or rights stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified Magnus Eriksson or Magnus VII of Norway and Magnus IV of Sweden was king of Sweden (spring 1316 &ndash December 1, 1374) Norway, and Many European nations chartered corporations to lead colonial ventures, such as the Dutch East India Company or the Hudson's Bay Company, and these corporations came to play a large part in the history of corporate colonialism. The Dutch East India Company ( Vereenigde Oost-Indische Compagnie or VOC in old-spelling Dutch, literally "United East Indian See Colony and Colonization for examples of colonialism which do not refer to Western colonialism

During the period of colonial expansion, in the seventeenth century, the true progenitors of the modern Corporation emerged as the "chartered company". Acting under a charter sanctioned by the Dutch monarch, the Vereenidge Oost-Indische Compagnie (VOC), or the Dutch East India Company, defeated Portuguese forces and established itself in the Moluccan Islands in order to profit off the European demand for spices. The Dutch East India Company ( Vereenigde Oost-Indische Compagnie or VOC in old-spelling Dutch, literally "United East Indian The Dutch East India Company ( Vereenigde Oost-Indische Compagnie or VOC in old-spelling Dutch, literally "United East Indian Portugal, officially the Portuguese Republic (República Portuguesa is a country on the Iberian Peninsula. The Maluku Islands (also known as the Moluccas, Moluccan Islands, the Spice Islands or simply Maluku) are an Archipelago A spice is a dried Seed, Fruit, Root, Bark or vegetative substance used in Nutritionally insignificant quantities as a Food additive Investors in the VOC were issues paper certificates as proof of share ownership, and were able to trade their shares on the original Amsterdam stock exchange. Amsterdam (pronounced) is the capital and largest city of the Netherlands, located in the province of North Holland in the west Shareholders are also explicitly granted limited liability in the company's royal charter. Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership ^[7] In the late seventeenth century, Stewart Kyd, the author of the first treatise on corporate law in English, defined a corporation as,

"a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested, by policy of the law, with the capacity of acting, in several respects, as an individual, particularly of taking and granting property, of contracting obligations, and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation, or at any subsequent period of its existence. Corporate law (also "company" or "corporations" law is the Law of the most dominant kind of business enterprise in the modern world "^[8]

Mercantilism

See also: Mercantilism and South Sea Bubble

A bond issued by the Dutch East India Company, dating from 1623, for the amount of 2,400 florins

Labelled by both contemporaries and historians as "the grandest society of merchants in the universe", the British East India Company would come to symbolize the dazzingly rich potential of the corporation, as well as new methods of business that could be both brutal and exploitive. Mercantilism is the idea that a colony should export more goods than it imports and that a colony should sell at higher prices and buy at lower prices For the Noel Coward play see South Sea Bubble (play. The South Sea Bubble of 1720 was an Economic bubble that occurred BOND (Building Object Network Databases started development in late 2000 as a Rapid application development tool for the GNOME Desktop by Treshna The Dutch East India Company ( Vereenigde Oost-Indische Compagnie or VOC in old-spelling Dutch, literally "United East Indian The Honourable East India Company ( HEIC) referred to most commonly as the East India Company, also historically and colloquially as John Company, or ^[9] On December 31, 1600, the English monarchy granted the company a fifteen-year monopoly on trade to and from the East Indies and Africa. The Kings of Wessex, who conquered Kent and Sussex from Mercia in 825 became increasingly dominant over the other kingdoms of England during The Indies or East Indies (or East India) is a term often used to refer to the islands of SE Asia, especially the Malay Archipelago By 1611 shareholders in the East India Company were earning an almost 150% return on their investment. In Finance, rate of return ( ROR) also known as return on investment ( ROI) rate of profit or sometimes just return, is Subsequent stock offerings demonstrated just how lucrative the Company had become. Its first stock offering in 1613-1616 raised ₤418,000, and its second offering in 1617-1622 raised ₤1. 6 million. ^[10]

In the United States, government chartering began to fall out of vogue in the mid-1800s. The United States of America —commonly referred to as the Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature. Investors generally had to be given an equal say in corporate governance, and corporations were required to comply with the purposes expressed in their charters. Many private firms in the 19th century avoided the corporate model for these reasons (Andrew Carnegie formed his steel operation as a limited partnership, and John D. Rockefeller set up Standard Oil as a trust). Andrew Carnegie (properly kɑrˈneɪgi but commonly /ˈkɑrnɨgi/ or /kɑrˈnɛgi/ (25 November 1835 – 11 August 1919 was a Scottish -born American Industrialist A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are John Davison Rockefeller ( July 8, 1839 &ndash May 23, 1937) was an American Industrialist and philanthropist Standard Oil was a predominant American integrated oil producing transporting refining and marketing company A special trust or business trust is business entity formed with intent to monopolize business to restrain trade, or to fix prices. Eventually, state governments began to realize the greater corporate registration revenues available by providing more permissive corporate laws. New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state. New Jersey ( is a state in the Mid-Atlantic and Northeastern regions of the United States. ^[11] Delaware followed, and soon became known as the most corporation-friendly state in the country after New Jersey raised taxes on the corporations, driving them out. Delaware ( is a state located on the Atlantic Coast in the Mid-Atlantic region of the United States. New Jersey reduced these taxes after this mistake was realized, but by then it was too late; even today, most major public corporations are set up under Delaware law.

By the beginning of the nineteenth century, government policy on both sides of the Atlantic began to change, reflecting the growing popularity of the proposition that corporations were riding the economic wave of the future. In 1819, the U. S. Supreme Court granted corporations a plethora of rights they had not previously recognized or enjoyed. ^[12] Corporate charters were deemed "inviolable," and not subject to arbitrary amendment or abolition by state governments. ^[13] The Corporation as a whole was labeled an "artificial person," possessing both individuality and immortality. ^[14]

At around the same time as the above events were occurring in the United States, British legislation was similarly freeing the corporation from the shackles of historical restrictions. In 1844 British Parliament passed the Joint Stock Companies Act, which allowed companies to incorporate without a royal charter or an additional act of Parliament. The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom and British overseas territories ^[15] Ten years later, England enshrined into law the preeminent hallmark of modern corporate law - the concept of limited liability. Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership Acting in response to increasing pressure from newly emerging capital interests, Parliament passed the Limited Liability Act of 1855, which established the principle that any corporation could enjoy limited legal liability on both contract and tort claims simply by registering as a "limited" company with the appropriate government agency. ^[16]

This revolutionary switch from unlimited to limited liability prompted a writer for the English periodical Economist to write in 1855 that "never, perhaps, was a change so vehemently and generally demanded, of which the importance was so much overrated. "^[17] The glaring inaccuracy of the second part of this judgment was recognized by the same magazine more than seventy-five years later, when it claimed that, "[t]he economic historian of the future . . . may be inclined to assign to the nameless inventor of the principle of limited liability, as applied to trading corporations, a place of honour with Watt and Stephenson, and other pioneers of the Industrial Revolution. The watt (symbol W) is the SI derived unit of power, equal to one Joule of energy per Second. Stephenson is a medieval Patronymic Surname meaning "son of Stephen " The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture manufacturing and transportation had a profound effect on the "^[18]

Modern corporations

By the end of the nineteenth century the forces of limited liability, state and national deregulation, and vastly increasing capital markets had come together to give birth to the corporation in its modern-day form. ^[19] The well-known Santa Clara County v. Southern Pacific Railroad decision, which was misinterpreted as declaring that corporations were recognized legal persons protected by the equal protection clause of the fourteenth amendment, began to influence policymaking. Santa Clara County v Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties Beginning with New Jersey and Delaware, U. New Jersey ( is a state in the Mid-Atlantic and Northeastern regions of the United States. Delaware ( is a state located on the Atlantic Coast in the Mid-Atlantic region of the United States. S. States engaged in a race to the bottom in their attempts to create more and more liberal and therefore, lucrative incorporation regulations. In Government regulation, a race to the bottom is a phenomenon that is said to occur when competition between nations or states (over Investment capital for example ^[20] The decline of restrictions on mergers and acquisitions encouraged a wave of corporate consolidation: from 1898 to 1904, 1,800 U. S. corporations were consolidated into 157. ^[21] The modern corporate era had begun.

The 20th century saw a proliferation of enabling law across the world, which some argue helped to drive economic booms in many countries before and after World War I. Starting in the 1980s, many countries with large state-owned corporations moved toward privatization, the selling of publicly owned services and enterprises to corporations. Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business Deregulation -- reducing the public-interest regulation of corporate activity -- often accompanied privatization as part of an ideologically laissez-faire policy. Deregulation, a term which gained widespread currency in the period 1970-2000 can be seen as a process by which governments remove reduce or simplify Restrictions on Business Laissez-faire ( pronunciation: French,; English,) is a French phrase literally meaning Let do (“allow to do” Another major postwar shift was toward the development of conglomerates, in which large corporations purchased smaller corporations to expand their industrial base. A conglomerate is a large Company that consists of seemingly unrelated Business sections Japanese firms developed a horizontal conglomeration model, the keiretsu, which was later duplicated in other countries as well. A is a set of companies with interlocking Business relationships and shareholdings.

Corporate law

Main article: Corporate law

Companies law
Company · Business
Sole proprietorship
Partnership (General · Limited · LLP)
Corporation
Cooperative
United States:
S corporation · C corporation LLC · LLLP · Series LLC Delaware corporation Nevada corporation Business trust
UK/Ireland/Commonwealth:
Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company
European Union/EEA:
SE · SCE
Other countries:
AB · AG · ANS · A/S · AS · GmbH
K.K. · N.V. · OY · S.A. · Full list
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

The existence of a corporation requires a special legal framework and body of law that specifically grants the corporation legal personality, and typically views a corporation as a fictional person, a legal person, or a moral person (as opposed to a natural person). Corporate law (also "company" or "corporations" law is the Law of the most dominant kind of business enterprise in the modern world Companies law (or the law of business associations) is the field of Law concerning business and other organizations Generally a company is a form of Business organization. The precise definition varies A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to A sole proprietorship, or simply proprietorship ( Benjamen Clark For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners In the commercial and legal parlance of most countries a general partnership or simply a Partnership, refers to an association of persons or an unincorporated A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. An S corporation or S-corp, for United States federal income tax purposes is a Corporation that makes a valid election to be taxed under Subchapter S of A C corporation (or C corp) is a Corporation in the United States that for Federal income tax purposes, is Taxed under and Subchapter C ( et A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company The limited liability limited partnership (LLLP is a relatively new modification of the limited partnership a form of Business entity recognized under U A Series LLC is a special form of a Limited liability company that provides liability protection across multiple "series" each of which is theoretically protected A Nevada Corporation is a Corporation chartered under the Laws of the U A Massachusetts business trust or MBT is a legal trust set up for the purposes of business but not necessarily in the state of Massachusetts. A limited company in the United Kingdom is a Corporation whose liability is limited by law A private company limited by shares is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries In British or Irish Company law, a company limited by guarantee is an alternative type of Corporation used primarily for Non-profit A Public Limited Company ( PLC, plc or plc or p l c is a type of Limited company in the United Kingdom or the Republic of Ireland which is A proprietary company is a form of Corporation in Australia that is limited by Shares. A community interest company (CIC is a new type of company introduced by the United Kingdom government in 2005 under The Community Interest Act 2004, designed The European Economic Area ( EEA) came into being on 1 January 1994 following an agreement between member states of European Free Trade Association (EFTAthe The Council Regulation on the Statute for a European Company of the European Union was adopted October 8 2001. TemplateExpert and TemplateExpert-subject, has been modified to include two WikiProjects and Portals (Expert-subject is limited to Aktiebolag (literally " share Company " or " Stock Company " is the Swedish term for " Limited Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i An ansvarlig selskap is a Norwegian personal responsibility Company model mainly used in small-to-medium businesses which translates directly into "Responsible An Aktieselskab (abbreviated A/S) is the Danish name for a Stock -based Corporation. Aksjeselskap is the Norwegian term for a Stock -based Company. Gesellschaft mit beschränkter Haftung ( GmbH) is a type of legal entity very common in Germany (where it was created in 1892 Austria nl '''''Naamloze Vennootschap''''' (usually abbreviated NV) is the Dutch term for a Public Limited liability Corporation. Osakeyhtiö, literally a " stock company " is the Finnish equivalent of a Limited company ( Ltd or LLC) or Gesellschaft For the art organization see Société Anonyme (art SA generally designates Corporations in various countries mostly those employing There are many types of business entity defined in the legal systems of various countries Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership Ultra vires is a Latin phrase that literally means "beyond the powers" The business judgment rule is an American Case law -derived concept in Corporations law whereby the "directors of a corporation. The internal affairs doctrine is a Choice of law rule in Corporations law. De facto corporation and corporation by estoppel are both terms that are used by Courts to describe circumstances in which a business organization that has The corporate law concept of piercing (lifting the corporate veil describes a legal decision where a shareholder or director of a Corporation is held liable for the The Rochdale Principles are a set of ideals for the operation of Cooperatives. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law Civil procedure is the body of law that sets out the process that Courts will follow when hearing cases of a civil nature (a " Civil action " as opposed to As such, corporate statutes typically give corporations the ability to own property, sign binding contracts, pay taxes in a capacity that is separate from that of its shareholders (who are sometimes referred to as "members". According to Lord Chancellor Haldane,

". The Lord High Chancellor of Great Britain, or Lord Chancellor is a senior and important functionary in the Government of the United Kingdom. Richard Burdon Sanderson Haldane 1st Viscount Haldane, KT, OM, PC, FRS, FSA ( 30 July 1856 - 19 August . . a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. "^[22]

The legal personality has two economic implications. First it grants creditors priority over the corporate assets upon liquidation. Second, corporate assets cannot be withdrawn by its shareholders, nor can the assets of the firm be taken by personal creditors of its shareholders. The second feature requires special legislation and a special legal framework, as it cannot be reproduced via standard contract law. ^[23]

The regulations most favorable to incorporation include:

Limited liability

Unlike in a partnership or sole proprietorship, shareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations. Incorporation (abbreviated Inc in US and Canadian business names is the forming of a new Corporation (a corporation being a legal entity For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners A sole proprietorship, or simply proprietorship ( Benjamen Clark ^[24] As a result their potential losses cannot exceed the amount which they contributed to the corporation as dues or paid for shares. In financial markets, a share is a Unit of account for various financial instruments including Stocks Mutual funds Limited partnerships Limited liability regulations enable corporations to socialize their costs for the primary benefit of shareholders. The economic rationale for this lies in the fact that it allows anonymous trading in the shares of the corporation by virtue of eliminating the corporation's creditors as a stakeholder in such a transaction. Without limited liability, a creditor would not likely allow any share to be sold to a buyer of at least equivalent creditworthiness as the seller. Limited liability further allows corporations to raise tremendously more funds for enterprises by combining funds from the owners of stock. Limited liability reduces the amount that a shareholder can lose in a company. This in turn greatly reduces the risk for potential shareholders and increases both the number of willing shareholders and the amount they are likely to invest.

Perpetual lifetime

Another favorable regulation, the assets and structure of the corporation exist beyond the lifetime of any of its shareholders, bondholders, or employees. In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. This allows for stability and accumulation of capital, which thus becomes available for investment in projects of a larger size and over a longer term than if the corporate assets remained subject to dissolution and distribution. In law dissolution has multiple meanings Dissolution is the last stage of Liquidation, the process by which a Company (or part of a company is brought to an This feature also had great importance in the medieval period, when land donated to the Church (a corporation) would not generate the feudal fees that a lord could claim upon a landholder's death. In this regard, see Statute of Mortmain. The Statutes of Mortmain were two enactments in 1279 and 1290 by King Edward I of England aimed at preserving the kingdom's revenues by preventing land It is important to note that the "perpetual lifetime" feature is an indication of the unbounded potential duration of the corporation's existence, and its accumulation of wealth and thus power. (In theory, a corporation can have its charter revoked at any time, putting an end to its existence as a legal entity. However, in practice, dissolution only occurs for corporations that request it or fail to meet annual filing requirements. )

Ownership and control

Persons and other legal entities composed of persons (such as trusts and other corporations) can have the right to vote or share in the profit of corporations. A trust company is a Corporation, especially a Commercial bank, organized to perform the Fiduciary functions of trusts and agencies In the case of for-profit corporations, these voters hold shares of stock and are thus called shareholders or stockholders. In financial markets, a share is a Unit of account for various financial instruments including Stocks Mutual funds Limited partnerships When no stockholders exist, a corporation may exist as a non-stock corporation, and instead of having stockholders, the corporation has members who have the right to vote on its operations. A non-stock corporation is a Corporation that does not have owners represented by shares of Stock. If the non-stock corporation is not operated for profit, it is called a not-for-profit corporation. In either category, the corporation comprises a collective of individuals with a distinct legal status and with special privileges not provided to ordinary unincorporated businesses, to voluntary associations, or to groups of individuals. A voluntary association or union (also sometimes called a voluntary organization, unincorporated association, or just an association) is a group

For the purposes of the next few paragraphs, the term "members" will be used to refer to stockholders of a stock corporation and members of a non-stock corporation.

There are two broad classes of corporate governance forms in the world. In most of the world, control of the corporation is determined by a board of directors which is elected by the shareholders. In some jurisdictions, such as Germany, the control of the corporation is divided into two tiers with a supervisory board which elects a managing board. A supervisory board is a group of individuals chosen by the Stockholders of a company to promote their interests through the governance of the company and to hire In German Corporate governance, a Vorstand is the management board of a Corporation. Germany is also unique in having a system known as co-determination in which half of the supervisory board consists of representatives of the employees. Co-determination (also codetermination is a practice whereby the employees have a role in management of a company The CEO, president, treasurer, and other titled officers are usually chosen by the board to manage the affairs of the corporation. A chief executive officer ( CEO) or chief executive is typically the highest-ranking corporate officer ( executive) or administrator

In addition to the influence of shareholders, corporations can be controlled (in part) by creditors such as banks. In return for lending money to the corporation, creditors can demand a controlling interest analogous to that of a member, including one or more seats on the board of directors. In some jurisdictions, such as Germany and Japan, it is standard for banks to own shares in corporations whereas in other jurisdictions such as the United States and the United Kingdom banks are prohibited from owning shares in external corporation.

Members of a corporation (except for non-profit corporations) are said to have a "residual interest. " Should the corporation end its existence, the members are the last to receive its assets, following creditors and others with interests in the corporation. This can make investment in a corporation risky; however, a diverse investment portfolio minimizes this risk. In addition, shareholders receive the benefit of limited liability regulations, making shareholders liable for only the amount they contributed. This only applies in the case of for-profit corporations; non-profits are not allowed to have residual benefits available to the members.

Formation

Historically, corporations were created by special charter of governments. A charter is the grant of authority or rights stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified Today, corporations are usually registered with the state, province, or national government and become regulated by the laws enacted by that government. Registration is the main prerequisite to the corporation's assumption of limited liability. As part of this registration, it must in many cases be required to designate the principal address of the corporation as well as a registered agent (a person or company that is designated to receive legal service of process). In the United States a registered agent is a business or individual designated to receive Service of process (SOP when a Business entity is a party As part of the registration, it may also be required to designate an agent or other legal representative of the corporation depending on the filing jurisdiction. For other uses of the word Agent see Agent (disambiguation This is correct An Agent in Commercial Law is a person who is authorised

Generally, a corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. The Articles of Incorporation (sometimes also referred to as the Certificate of Incorporation or the Corporate Charter) are the primary rules governing the management Once the articles are approved, the corporation's directors meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions. A bylaw (sometimes also spelled by-law or byelaw) most commonly refers to a city or municipal law or ordinance passed under the authority of a Charter

The law of the jurisdiction in which a corporation operates will regulate most of its internal activities, as well as its finances. If a corporation operates outside its home state, it is often required to register with other governments as a foreign corporation, and is almost always subject to laws of its host state pertaining to employment, crimes, contracts, civil actions, and the like. A foreign corporation is an existing Corporation that is registered to do business in a jurisdiction other than where it was originally incorporated Employment is a Contract between two parties, one being the employer and the other being the employee. In the sociological field, crime is the breach of a rule or Law for which some governing authority or force may ultimately prescribe a Punishment A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law In law a lawsuit is a civil action brought before a Court in which the party commencing the action the Plaintiff, seeks a legal or equitable remedy

Naming

Corporations generally have a distinct name. Historically, some corporations were named after their membership: for instance, "The President and Fellows of Harvard College. " Nowadays, corporations in most jurisdictions have a distinct name that does not need to make reference to their membership. In Canada, this possibility is taken to its logical extreme: many smaller Canadian corporations have no names at all, merely numbers based on their Provincial Sales Tax registration number (e. In Canada there are three types of Sales taxes provincial sales taxes or PST the federal Goods and Services Tax or GST, and the Harmonized Sales Tax or HST g. , "12345678 Ontario Limited").

In most countries, corporate names include the term "Corporation", or an abbreviation that denotes the corporate status of the entity. These terms vary by jurisdiction and language. In some jurisdictions they are mandatory, and in others they are not. ^[25] Their use puts all persons on constructive notice that they have to deal with an entity whose liability remains limited, in the sense that it does not reach back to the persons who constitute the entity; one can only collect from whatever assets the entity still controls at the time one obtains a judgment against it. Constructive notice is a Legal fiction used in the Law of both Common law and civil law systems to signify that a person or entity is legally

Certain jurisdictions do not allow the use of the word "company" alone to denote corporate status, since the word "company" may refer to a partnership or to a sole proprietorship, or even, archaically, to a group of not necessarily related people (for example, those staying in a tavern). For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners A sole proprietorship, or simply proprietorship ( Benjamen Clark

Unresolved issues

The nature of the corporation continues to evolve in response to new situations as existing corporations promote new ideas and structures, the courts respond, and governments issue new regulations. A question of long standing is that of diffused responsibility. For example, if a corporation is found liable for a death, how should culpability and punishment for it be allocated among shareholders, directors, management and staff, and the corporation itself? See corporate liability, and specifically, corporate manslaughter. In the Criminal law, corporate liability determines the extent to which a Corporation as a fictitious person can be liable for the acts and omissions Corporate manslaughter is a Crime in several Jurisdictions It enables a Corporation to be punished and censured for culpable conduct that leads to a person's

The law differs among jurisdictions, and is in a state of flux. Some argue that shareholders should be ultimately responsible in such circumstances, forcing them to consider issues other than profit when investing, but a corporation may have millions of small shareholders who know nothing about its business activities. Moreover, traders — especially hedge funds — may turn over shares in corporations many times a day. A hedge fund is a private Investment fund open to a limited range of investors which is permitted by regulators to undertake a wider range of activities than other investment ^[26]The issue of corporate repeat offenders (see H. Glasbeak, "Wealth by Stealth: Corporate Crime, Corporate Law, and the Perversion of Democracy" (Between the Lines Press: Toronto 2002) raises the question of the so-called "death penalty for corporations. "^[27]

Types of corporations

For a list of types of corporation and other business types by country, see Types of business entity. There are many types of business entity defined in the legal systems of various countries

Most corporations are registered with the local jurisdiction as either a stock corporation or a non-stock corporation. Stock corporations sell stock to generate capital. A stock corporation is generally a for-profit corporation. A non-stock corporation does not have stockholders, but may have members who have voting rights in the corporation. A non-stock corporation is a Corporation that does not have owners represented by shares of Stock.

Some jurisdictions (Washington, D.C., for example) separate corporations into for-profit and non-profit, as opposed to dividing into stock and non-stock. Washington DC ( formally the District of Columbia and commonly referred to as Washington, the District, or simply D

For-profit and non-profit

Main article: non-profit organization

In modern economic systems, conventions of corporate governance commonly appear in a wide variety of business and non-profit activities. A non-profit organization ( abbreviated "NPO" also "not-for-profit" is a legally constituted Organization whose objective is to support or engage Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled A non-profit organization ( abbreviated "NPO" also "not-for-profit" is a legally constituted Organization whose objective is to support or engage Though the laws governing these creatures of statute often differ, the courts often interpret provisions of the law that apply to profit-making enterprises in the same manner (or in a similar manner) when applying principles to non-profit organizations — as the underlying structures of these two types of entity often resemble each other. A statute is a formal written enactment of a Legislative authority that governs a Country, State, City, or County.

Closely held and public

The institution most often referenced by the word "corporation" is a public or publicly traded corporation, the shares of which are traded on a public stock exchange (e. g. , the New York Stock Exchange or Nasdaq in the United States) where shares of stock of corporations are bought and sold by and to the general public. The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. The NASDAQ (acronym of National Association of Securities Dealers Automated Quotations) is an American Stock exchange. Most of the largest businesses in the world are publicly traded corporations. However, the majority of corporations are said to be closely held, privately held or close corporations, meaning that no ready market exists for the trading of shares. Many such corporations are owned and managed by a small group of businesspeople or companies, although the size of such a corporation can be as vast as the largest public corporations.

Closely held corporations do have some advantages over publicly traded corporations. A small, closely held company can often make company-changing decisions much more rapidly than a publicly traded company. A publicly traded company is also at the mercy of the market, having capital flow in and out based not only on what the company is doing but the market and even what the competitors are doing. Publicly traded companies also have advantages over their closely held counterparts. Publicly traded companies often have more working capital and can delegate debt throughout all shareholders. Working capital, also known as net working capital, is a financial metric which represents operating liquidity available to a business This means that people invested in a publicly traded company will each take a much smaller hit to their own capital as opposed to those involved with a closely held corporation. Publicly traded companies though suffer from this exact advantage. A closely held corporation can often voluntarily take a hit to profit with little to no repercussions (as long as it is not a sustained loss). A publicly traded company though often comes under extreme scrutiny if profit and growth are not evident to stock holders, thus stock holders may sell, further damaging the company. Often this blow is enough to make a small public company fail.

Often communities benefit from a closely held company more so than from a public company. A closely held company is far more likely to stay in a single place that has treated them well, even if going through hard times. The shareholders can incur some of the damage the company may receive from a bad year or slow period in the company profits. Workers benefit in that closely held companies often have a better relationship with workers. In larger, publicly traded companies, often when a year has gone badly the first area to feel the effects are the work force with lay offs or worker hours, wages or benefits being cut. Again, in a closely held business the shareholders can incur this profit damage rather than passing it to the workers. Closely held businesses are also often known to be more socially responsible than publicly traded companies. Social responsibility is an ethical or ideological theory that an Entity whether it is a Government, Corporation, Organization

The affairs of publicly traded and closely held corporations are similar in many respects. The main difference in most countries is that publicly traded corporations have the burden of complying with additional securities laws, which (especially in the U. S. ) may require additional periodic disclosure (with more stringent requirements), stricter corporate governance standards, and additional procedural obligations in connection with major corporate transactions (e. g. mergers) or events (e. g. elections of directors).

A closely held corporation may be a subsidiary of another corporation (its parent company), which may itself be either a closely held or a public corporation. A subsidiary, in business matters is an entity that is controlled by a bigger and more powerful entity A parent company is a Company that owns enough voting stock in another firm to control management and operations by influencing or electing its Board of directors

Mutual benefit corporations

A mutual benefit nonprofit corporation is a corporation formed in the United States solely for the benefit of its members. An example of a mutual benefit nonprofit corporation is a golf club. Individuals pay to join the club, memberships may be bought and sold, and any property owned by the club is distributed to its members if the club dissolves. The club can decide, in its corporate bylaws, how many members to have, and who can be a member. Generally, while it is a nonprofit corporation, a mutual benefit corporation is not a charity. Because it is not a charity, a mutual benefit nonprofit corporation cannot obtain 501(c)(3) status. If there is a dispute as to how a mutual benefit nonprofit corporation is being operated, it is up to the members to resolve the dispute since the corporation exists to solely serve the needs of its membership and not the general public. ^[28]

Corporations globally

Main article: Multinational corporation

Following on the success of the corporate model at a national level, many corporations have become transnational or multinational corporations: growing beyond national boundaries to attain sometimes remarkable positions of power and influence in the process of globalizing. Multinational corporation ( MNC) or transnational corporation ( TNC) is a Corporation or enterprise that manages Production or delivers Multinational corporation ( MNC) or transnational corporation ( TNC) is a Corporation or enterprise that manages Production or delivers Globalization (or globalisation) in its literal sense is the process of transformation of local or regional phenomena into global ones

The typical "transnational" or "multinational" may fit into a web of overlapping shareholders and directorships, with multiple branches and lines in different regions, many such sub-groupings comprising corporations in their own right. Growth by expansion may favor national or regional branches; growth by acquisition or merger can result in a plethora of groupings scattered around and/or spanning the globe, with structures and names which do not always make clear the structures of shareholder ownership and interaction.

In the spread of corporations across multiple continents, the importance of corporate culture has grown as a unifying factor and a counterweight to local national sensibilities and cultural awareness. Organizational culture is a concept in the field of Organizational studies and Management which describes the attitudes experiences beliefs and values

Australia

Main article: Corporations Act 2001

In Australia corporations are registered and regulated by the Commonwealth Government through the Australian Securities and Investments Commission. The Corporations Act 2001 (Cth, sometimes referred to just as the Corporations Act (or informally as the 'Corps' Act is an act of the Commonwealth of Australia that sets out For a topic outline on this subject see List of basic Australia topics. The Australian Securities & Investments Commission (ASIC is an independent Australian government body that acts as Australia 's corporate regulator Corporations law has been largely codified in the Corporations Act 2001. The Corporations Act 2001 (Cth, sometimes referred to just as the Corporations Act (or informally as the 'Corps' Act is an act of the Commonwealth of Australia that sets out

Brazil

In Brazil there are many different types of corporations ("sociedades"), but the two most common ones commercially speaking are: (i) "sociedade limitada", identified by "Ltda. |utc_offset = -2 to -4 |time_zone_DST = BRST |utc_offset_DST = -2 to -5 |cctld " after the company's name, equivalent to the British limited company, and (ii) "sociedade anônima" or "companhia", identified by "SA" or "Companhia" in the company's name, equivalent to the British public limited company. The "Ltda. " is mainly governed by the new Civil Code, enacted in 2002, and the "SA" by the Law 6. 404 dated 15 December 1976. Events 533 - Byzantine general Belisarius defeats the Vandals, commanded by King Gelimer, at the Battle of Year 1976 ( MCMLXXVI) was a Leap year starting on Thursday (link will display full calendar of the Gregorian calendar.

Canada

In Canada both the federal government and the provinces have corporate statutes, and thus a corporation may have a provincial or a federal charter. Country to "Dominion of Canada" or "Canadian Federation" or anything else please read the Talk Page A province is a territorial unit almost always an Administrative division. Many older corporations in Canada stem from Acts of Parliament passed before the introduction of general corporation law. An Act of Parliament is a Law enacted as Primary legislation by a national or sub-national Parliament. The oldest corporation in Canada is the Hudson's Bay Company; though its business has always been based in Canada, its Royal Charter was issued in England by King Charles II in 1670, and became a Canadian charter by amendment in 1970 when it moved its corporate headquarters from London to Canada. A Royal Charter is a Charter granted by the Sovereign on the advice of the Privy council to legitimize an incorporated body such as a city company Charles II (Charles Stuart 29 May 1630 – 6 February 1685 was the King of England, Scotland, and Ireland. Federally recognized corporations are regulated by the Canada Business Corporations Act. The Canada Business Corporations Act, also known as Bill C-44, is a Canadian act respecting Canadian business corporations

German-speaking countries

Main article: Aktiengesellschaft

Germany, Austria, Switzerland and Liechtenstein recognize two forms of corporation: the Aktiengesellschaft (AG), analogous to public corporations in the English-speaking world, and the Gesellschaft mit beschränkter Haftung (GmbH), similar to (and an inspiration for) the modern limited liability company. Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i Germany, officially the Federal Republic of Germany ( ˈbʊndəsʁepuˌbliːk ˈdɔʏtʃlant is a Country in Central Europe. Austria (Österreich ( officially the Republic of Austria (Republik Österreich Switzerland (English pronunciation; Schweiz Swiss German: Schwyz or Schwiiz Suisse Svizzera Svizra officially the Swiss Confederation The Principality of Liechtenstein (Fürstentum Liechtenstein) is a tiny doubly landlocked Alpine country in Western Europe, bordered by Switzerland Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i Gesellschaft mit beschränkter Haftung ( GmbH) is a type of legal entity very common in Germany (where it was created in 1892 Austria A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company

Italy

Italy recognises two forms of companies with limited liability: "S. Italy (Italia officially the Italian Republic, (Repubblica Italiana is located on the Italian Peninsula in Southern Europe, and on the two largest r. l", or "Società a Responsabilità Limitata" (similar to Limited liability company) and "S. A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company p. A" or "Società Per Azioni" (similar to American stock corporation).

Japan

The predominant form of business corporation in Japan is the kabushiki kaisha, used by public corporations as well as smaller enterprises. For a topic outline on this subject see List of basic Japan topics. Mochibun kaisha, a form for smaller enterprises, are becoming increasingly common. are a class of Corporations under Japanese law. While mochibun kaisha have legal personality as corporations their internal functions are similar to Partnerships

United Kingdom

Main article: UK company law

In the United Kingdom, 'corporation' most commonly refers to a body corporate formed by Royal Charter or by statute, of which few now remain. United Kingdom company law is governed by the Companies Act 2006. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located In English Law (and as a result throughout the Commonwealth Realms) body corporate is the legal term for a Corporation. A Royal Charter is a Charter granted by the Sovereign on the advice of the Privy council to legitimize an incorporated body such as a city company The BBC is the oldest and best known corporation still in existence. Others, such as the British Steel Corporation, were privatized in the 1980s. Corus is a subsidiary of Tata Steel, part of India 's Tata Group and world's fifth largest steel producer, headquartered in London, Privatization is the incidence or process of transferring ownership of business from the Public sector (government to the Private sector (business

In the private sector, corporations are referred to in law as companies, and are regulated by the Companies Act 2006 (or the Northern Ireland equivalent). The Companies Act 2006 (c46 is a Statute of the United Kingdom regulating companies within that jurisdiction Northern Ireland (Tuaisceart Éireann Ulster Scots: Norlin Airlann) is a Country within the United Kingdom, lying in the northeast of The most common type of company is the private limited company ("Limited" or "Ltd. A limited company in the United Kingdom is a Corporation whose liability is limited by law "). Private limited companies can either be limited by shares or by guarantee. Other corporate forms include the public limited company ("PLC") and the unlimited company. A Public Limited Company ( PLC, plc or plc or p l c is a type of Limited company in the United Kingdom or the Republic of Ireland which is In the United Kingdom, an unlimited company is a company formed by registration under the Companies Act 1985 where the liability of the members is unlimited -

United States

Main article: Delaware corporation

Several types of corporations exist in the United States. The United States of America —commonly referred to as the Generically, any business entity that is recognized as distinct from the people who own it (i. e. , is not a sole proprietorship or a partnership) is a corporation. This generic label includes entities that are known by such legal labels as ‘association’, ‘organization’ and ‘limited liability company’, as well as corporations proper. Only a company that has been formally incorporated according to the laws of a particular state is called ‘corporation’. American corporations can be either profit-making companies or non-profit entities. Tax-exempt non-profit corporations are often called “501(c)3 corporation”, after the section of the Internal Revenue Code that addresses their tax exemption. The Internal Revenue Code (or IRC; more formally the Internal Revenue Code of 1986 as amended) is the main body of domestic statutory Tax law

Corporations are created by filing the requisite documents with a particular state government. The process is called “incorporation,” referring to the abstract concept of clothing the entity with a "veil" of artificial personhood (embodying, or “corporating” it, ‘corpus’ being the Latin word for ‘body’). Only certain corporations, including banks, are chartered. Others simply file their articles of incorporation with the state government as part of a registration process.

The federal government can only create corporate entities pursuant to relevant powers in the U.S. Constitution. The federal government of the United States is the central United States Governmental body established by the United States Constitution. The Constitution of the United States of America is the supreme Law of the United States. For example, Congress has constitutional power to regulate banking, so it has power to charter federal banks. Additionally, Congress has power to create and own corporations that serve a purpose of the federal government, such as Amtrak or the Federal Deposit Insurance Corporation. The National Railroad Passenger Corporation, Doing business as Amtrak, is a Government-owned corporation that was organized on May 1, 1971 The Federal Deposit Insurance Corporation ( FDIC) is a United States government corporation created by the Glass-Steagall Act of 1933

Once incorporated, the corporation has artificial personhood everywhere it may operate, until such time as the corporation may be dissolved. A corporation that operates in one state while being incorporated in another is a “foreign corporation. ” This label also applies to corporations incorporated outside of the United States. Foreign corporations must usually register with the secretary of state’s office in each state to lawfully conduct business in that state.

A corporation is legally a citizen of the state (or other jurisdiction) in which it is incorporated (except when circumstances direct the corporation be classified as a citizen of the state in which it has its head office, or the state in which it does the majority of its business). Corporate business law differs from state to state, and many prospective corporations choose to incorporate in a state whose laws are most favorable to its business interests. Many large corporations are incorporated in Delaware, for example, without being physically located there because that state has very favorable corporate tax and disclosure laws.

Companies set up for privacy or asset protection often incorporate in Nevada, which does not require disclosure of share ownership. Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively Nevada ( is a state located in the western region of the United States of America. Many states, particularly smaller ones, have modeled their corporate statutes after the Model Business Corporation Act, one of many model sets of law prepared and published by the American Bar Association. The Model Business Corporation Act of 1950 (MBCA is an model set of law prepared by the Committee on Corporate Laws of the Section of Business Law of the American Bar Association The American Bar Association ( ABA) founded August 21 1878 is a voluntary Bar association of Lawyers and law students which is not specific

As juristic persons, corporations have certain rights that attach to natural purposes. Note This Wikipedia entry deals with the legal concept legal person. The vast majority of them attach to corporations under state law, especially the law of the state in which the company is incorporated – since the corporations very existence is predicated on the laws of that state. A few rights also attach by federal constitutional and statutory law, but they are few and far between compared to the rights of natural persons. For example, a corporation has the personal right to bring a lawsuit (as well as the capacity to be sued) and, like a natural person, a corporation can be libeled.

But a corporation has no constitutional right to freely exercise its religion because religious exercise is something that only "natural" persons can do. That is, only human beings, not business entities, have the necessary faculties of belief and spirituality that enable them to possess and exercise religious beliefs.

Harvard College (a component of Harvard University), formally the President and Fellows of Harvard College (also known as the Harvard Corporation), is the oldest corporation in the western hemisphere. Harvard College is the undergraduate section and oldest school of Harvard University, a Private university in the United States founded in 1636 by the Massachusetts The President and Fellows of Harvard College (also known as the Harvard Corporation) is the more fundamental of Harvard University 's two governing boards Founded in 1636, the second of Harvard’s two governing boards was incorporated by the Great and General Court of Massachusetts in 1650. Significantly, Massachusetts itself was a corporate colony at that time – owned and operated by the Massachusetts Bay Company (until it lost its charter in 1684) - so Harvard College is a corporation created by a corporation.

Many nations have modeled their own corporate laws on American business law. Corporate law in Saudi Arabia, for example, follows the model of New York State corporate law. The Kingdom of Saudi Arabia, KSA ( المملكة العربية السعودية, al-Mamlaka al-ʻArabiyya as-Suʻūdiyya) or Suudi In addition to typical corporations in the United States, the federal government, in 1971 passed the Alaska Native Claims Settlement Act (ANCSA), which authorized the creation of 12 regional native corporations for Alaska Natives and over 200 village corporations that were entitled to a settlement of land and cash. The Alaska Native Claims Settlement Act, commonly abbreviated ANCSA, was signed into law by President Richard M Alaska Natives are Indigenous peoples of the Americas native to the state of Alaska within the United States. In addition to the 12 regional corporations, the legislation permitted a thirteenth regional corporation without a land settlement for those Alaska Natives living out of the State of Alaska at the time of passage of ANCSA. Alaska ( Аляска Alyaska) is a state in the United States of America, in the northwest of the North American continent

Corporate taxation

Main article: Corporate tax

In many countries corporate profits are taxed at a corporate tax rate, and dividends paid to shareholders are taxed at a separate rate. Corporate tax refers to a Tax levied by various jurisdictions on the Profits made by companies or associations. Such a system is sometimes referred to as "double taxation", because any profits distributed to shareholders will eventually be taxed twice. Double taxation is the imposition of two or more Taxes on the same income (in the case of income taxes) Asset (in the case of capital taxes) One solution to this (as in the case of the Australian and UK tax systems) is for the recipient of the dividend to be entitled to a tax credit which addresses the fact that the profits represented by the dividend have already been taxed. The company profit being passed on is therefore effectively only taxed at the rate of tax paid by the eventual recipient of the dividend. In other systems, dividends are taxed at a lower rate than other income (e. g. in the US) or shareholders are taxed directly on the corporation's profits and dividends are not taxed (e. g. S corporations in the US). An S corporation or S-corp, for United States federal income tax purposes is a Corporation that makes a valid election to be taxed under Subchapter S of

Corporations' criticism

Adam Smith in the Wealth of Nations criticized the joint-stock company corporate form because of the separation of ownership and management. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. A joint stock company (JSC is a type of business entity it is a type of Corporation or Partnership.

The directors of such [joint-stock] companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. . . . Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.

The context for Adam Smith’s term for “companies” in the Wealth of Nations was the joint-stock company. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. In the 18th century, the joint-stock company was a distinct entity created by the King of Great Britain as Royal Charter trading companies. These entities were awarded legal monopoly in designated regions of the world, such as the British East India Company. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient The Honourable East India Company ( HEIC) referred to most commonly as the East India Company, also historically and colloquially as John Company, or

Furthermore the context of the quote points to the complications inherent in chartered joint-stock companies. Each company had a Courts of Governors and day-to-day duties were overseen by local managers. Governor supervision of day-to-day operations was minimal and was exacerbated by the geography of the 18th century. Geography (from Greek γεωγραφία - geografia) is the study of the Earth and its lands features inhabitants and phenomena

The sailing time from India to Great Britain was many months and round trip routes often took a year or longer. It was during the interim time period that local managers took advantage of the time delay by plundering the local population at the expense of the interests of shareholders. Bribery and corruption were inherent in this type of corporate model as the local managers sought to avoid close supervision by the Courts of Governors, politicians, and Prime Ministers. In these circumstances, Smith did not consider joint-stock company governance to be honest. ^[29] More importantly, the East India Company demonstrated inherent flaws in the corporate form. The division between owners and managers in a joint-stock company, and the limited legal liability this division was based on guaranteed that stockholders would be apathetic about a company's activities as long as the company continued to be profitable. Just as problematic, the laws of agency upon which the corporate form was based allowed for boards of directors to be so autonomous from and unconstrained by stockholder wishes that directors became negligent and ultimately self-interested in the management of the corporation. Agency is an area of Commercial law dealing with a Contractual or Quasi-contractual Tripartite set of relationships when an Agent ^[30]

Legal Scholar and Professor of Law at the University of British Columbia Joel Bakan describes the modern corporate entity as 'an institutional psychopath' and a 'psychopathic creature. The University of British Columbia ( UBC) is a Canadian public research University with campuses near Vancouver and in Kelowna Joel Conrad Bakan (born 1959 is a Canadian lawyer and writer Born in Lansing Michigan and raised for most of his childhood in East Lansing Michigan ' In the documentary The Corporation, Bakan claims that corporations, when considered as natural living persons, exhibit the traits of antisocial personality disorder or psychopathy. The Corporation is a 2003 Canadian Documentary film critical of the modern-day Corporation, considering it as a class of Person and Antisocial personality disorder ( APD) is a Mental disorder.It is defined by the American Psychiatric Association 's Diagnostic and Statistical Psychopathy ( is a psychological construct that describes chronic immoral and Antisocial behavior Also in the film, Robert Monks, a former Republican Party candidate for Senate from Maine, claims that:

"The corporation is an externalizing machine (moving its operating costs to external organizations and people), in the same way that a shark is a killing machine. The State of Maine ( is a state in the New England region of the northeastern United States of America, bordering the Atlantic Ocean "^[31]

Noam Chomsky has criticized the legal decisions that led to the creation of the modern corporation:

Corporations, which previously had been considered artificial entities with no rights, were accorded all the rights of persons, and far more, since they are "immortal persons", and "persons" of extraordinary wealth and power. Avram Noam Chomsky (noʊm ˈtʃɑmski born December 7 1928 is an American linguist, Philosopher, cognitive scientist, Political Furthermore, they were no longer bound to the specific purposes designated by State charter, but could act as they choose, with few constraints. ^[32]

Recent events in corporate America may suggest that exploitive behavior common during the time of Adam Smith may not be a mere historical curiosity. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. ^[33]

Influential scholars Frank Easterbrook and Daniel Fischel, as an aside to their primary thesis, limitedly argue that if wealth-maximization is a normative priority of societal policy, then corporate law serves the general welfare by mimicking, without the heavy cost of negotiation, the contractual agreements that would be reached by shareholders, managers and employees. Frank Hoover Easterbrook (born 1948 is Chief Judge of the United States Court of Appeals for the Seventh Circuit. Daniel R Fischel (1950 -) is the emeritus Lee and Brena Freeman Professor of Law and Business and former Dean of University of Chicago Law School, and a co-founder For example:

"Limited liability decreases the need to monitor agents. To protect themselves [in its absence], investors could monitor their agents more closely. The more risk they bear, the more they will monitor. But beyond a point extra monitoring is not worth the cost. Moreover, specialized risk bearing implies that many investors will have diversified holdings. Only a portion of their wealth will be invested in one firm. These diversified investors have neither the expertise nor the incentive to monitor the actions of more specialized agents. Limited liability makes diversification and passivity a more rational strategy and so potentially reduces the cost of operating the corporation. "^[34]

Other business entities

Almost every recognized type of organization carries out some economic activities (e. g. the family). A family business is a business in which one or more members of one or more families have a significant ownership interest and significant commitments toward the business’ overall well-being Other organizations that may carry out activities that are generally considered to be business exist under the laws of various countries. These include:

• Consumers' cooperative
• Partnership
• Limited partnership (LP)
• Limited liability partnership (LLP)
• Limited liability limited partnership (LLLP)
• Limited liability company (LLC)
• Limited company (Ltd. A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit. For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. The limited liability limited partnership (LLLP is a relatively new modification of the limited partnership a form of Business entity recognized under U A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company A limited company in the United Kingdom is a Corporation whose liability is limited by law )
• Not-for-profit corporation
• Sole proprietorship
• Trust company, Trust law

See also

• Alaska Native Corporation
• Blocker corporation
• Bylaw
• Commercial law
• Community interest company
• Company (law)
• Conglomerate (company)
• Cooperative
• Corporate Darwinism
• Corporate governance
• Corporate haven
• Corporate Watch
• Corporatism
• Delaware corporation
• Finance capitalism
• Anti-corporate activism
• Guild
• Incorporation (business)
• Limited company
• Limited liability company (LLC)
• Megacorporation (fictional)
• Organizational culture
• Preferred stock
• Professional corporation (PC or P. A sole proprietorship, or simply proprietorship ( Benjamen Clark A trust company is a Corporation, especially a Commercial bank, organized to perform the Fiduciary functions of trusts and agencies In Common law legal systems a trust is an arrangement whereby Property (including real tangible and intangible is managed by one person (or persons or organizations The Alaska Native Claims Settlement Act, commonly abbreviated ANCSA, was signed into law by President Richard M A blocker corporation is a type of C Corporation in the United States of America that has been used by tax exempt individuals to protect their investments from taxation A bylaw (sometimes also spelled by-law or byelaw) most commonly refers to a city or municipal law or ordinance passed under the authority of a Charter Commercial law (sometimes known as business law) is the body of Law which governs Business and commercial transactions A community interest company (CIC is a new type of company introduced by the United Kingdom government in 2005 under The Community Interest Act 2004, designed Generally a company is a form of Business organization. The precise definition varies A conglomerate is a large Company that consists of seemingly unrelated Business sections Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled A corporate haven is a jurisdiction with laws friendly to Corporations thereby encouraging them to choose that jurisdiction as a legal domicile Corporate Watch is a small independent Not-for-profit research and Publishing group based in Oxford which undertakes research on the social and environmental Historically corporatism (corporativismo refers to a political or Economic system in which power is held by civic assemblies that represent Economic Finance capitalism is a term in Marxian Political economics defined as the subordination of processes of Production to the accumulation of Money Anti-corporate activists (see Activism) believe that the rise of large business Corporations is posing a threat to the legitimate authority of the public good A guild is an association of craftsmen in a particular trade The earliest guilds were formed as confraternities of workers Incorporation (abbreviated Inc in US and Canadian business names is the forming of a new Corporation (a corporation being a legal entity A limited company in the United Kingdom is a Corporation whose liability is limited by law A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company " Megacorporation " is a term popularized by William Gibson derived from the combination of the prefix Mega- with the word Corporation. Organizational culture is a concept in the field of Organizational studies and Management which describes the attitudes experiences beliefs and values Preferred stock, also called preferred shares or preference shares, is typically a higher ranking stock than Voting shares, and its terms are negotiated Professional corporations (abbreviated as PC or PC) are those corporate entities for which many Corporation statutes make special provision regulating C. )
• Public limited company (PLC)
• Registered Agent
• Shelf Corporation
• Stock certificates
• The Corporation − a documentary focusing on surge of corporate power in our society over the last two centuries
• Unlimited liability corporation

Footnotes

References

• A Comparative Bibliography: Regulatory Competition on Corporate Law
• Sobel, Robert. Robert Sobel ( February 19 1931 &ndash June 2, 1999) was an American professor of history at Hofstra University, and The Age of Giant Corporations: a Microeconomic History of American Business. (1984)
• Klein and Coffee. Business Organization and Finance: Legal and Economic Principles. Foundation. 2002. ISBN -X
• Hessen, Robert. Robert Hessen, PhD, is an American economic and business historian, a widely published author a Professor in the Graduate In Defense of the Corporation. Hoover Institute. 1979. ISBN -X
• Bromberg, Alan R. Crane and Bromberg on Partnership. 1968.
• Conard, Alfred F. Corporations in Perspective. 1976.
• Dignam, A and Lowry, J (2006) Company Law, Oxford University Press ISBN-13: 978-0-19-928936-3
• John Micklethwait and Adrian Wooldridge. The Company: a Short History of a Revolutionary Idea. New York: Modern Library. 2003.
• Blumberg, Phillip I. , The Multinational Challenge to Corporation Law: The Search for a New Corporate Personality, (1993)

• John William Cadman, The Corporation in New Jersey: Business and Politics, , (1949)
• C. A. Cooke, Corporation, Trust and Company: A Legal History, (1950)
• John P. Davis, Corporations (1904)
• Joseph S. Davis, Essays in the Earlier History of American Corporations (1917)
• A. B. DuBois, The English Business Company after the Bubble Act, , (1938)
• Edwin Merrick Dodd, American Business Corporations until 1860, With Special Reference to Massachusetts, (1954)
• Charles Freedman, Joint-stock Enterprise in France, : From Privileged Company to Modern Corporation (1979)
• Ernst Freund, The Legal Nature of the Corporation, (1897)
• Frederick Hallis, Corporate Personality: A Study in Jurisprudence (1930)
• Bishop Hunt, The Development of the Business Corporation in England (1936)
• Ramesh Chandra Majumdar, Corporate Life in Ancient India, (1920)
• Robert Charles Means, Underdevelopment and the Development of Law: Corporations and Corporation Law in Nineteenth-century Colombia, (1980)
• Thomas Owen, The Corporation under Russian Law, : A Study in Tsarist Economic Policy (1991)
• Radhe Shyam Rungta, The Rise of the Business Corporation in India, 1851–1900, (1970)
• W. Ernst Freund (January 30 1864 in New York City – October 20 1932 in Chicago Illinois) was a noted American legal scholar R. Scott, Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720 (1912)
• Bruce Brown, The History of the Corporation (2003)

Further reading

• Barnet, Richard; Ronald E. Muller (1974). Global Reach: The Power of the Multinational Corporation. New York, NY: Simon & Schuster.  

External links

• US Corporate Law at Wikibooks