corporation

corporation,

in law, organization enjoying legal personality for the purpose of carrying on certain activities. Most corporations are businesses for profit; they are usually organized by three or more subscribers who raise capital for the corporate activities by selling shares of stockstock,
in finance, instrument certifying to shares in the ownership of a corporation. Bonds are similar evidences of shares in a loan to a corporation. Stock yields no dividends until claims of bondholders have been met.
..... Click the link for more information. , which represent ownership and are transferable. Besides business corporations, there are also charitable, cooperative, municipal, and religious corporations, all with distinctive features. In the United States all governmental units smaller than a state (e.g., counties, cities) are municipal corporations. Certain religious functionaries (e.g., Roman Catholic archbishops) legally are corporations sole.

The legal personality of a corporation is symbolized by its seal and its distinctive name. As a legal person, the corporation continues in existence when the organizers lose their connection with it. In most cases its liability is limited to the assets it possesses and creditors may not seize property of persons associated with the corporation as stockholders or otherwise. Legal personality gives the corporation many of the capacities of a natural person; e.g., it can hold property and can even commit crimes (for which it may be fined and its directors imprisoned).

The Modern Corporation

The modern concept of corporate power holds that the rights of the participants as well as the conduct of the enterprise must be the subject of managerial discretion. The salient characteristic of the modern corporation is the separation of management from ownership. Management of industrial corporations now requires executive managers and a corporate bureacracy to oversee its complex and interlacing activities.

The large business corporation has strongly influenced the control of property in the modern world. The large corporations are typically controlled by a small minority of the stockholders. There are several methods employed by small groups of stockholders to gain control of large corporations. These include pooling of the majority of stock in the hands of trustees having the power to vote it and the use of proxies (agents for the actual stockholders pledged to vote for particular candidates for managerial positions). Proxies are generally successfully used because stockholders rarely attend meetings or name proxies other than those suggested to them by management.

A more recent type of corporation is the holding company, organized to buy a controlling interest in other corporations; this type of corporation typically possesses no physical assets. The amount of cash needed to control a concern is lessened by pyramiding holding companies. This is done by creating a company to hold a voting control of one or more operating companies. A third company is created to hold a controlling interest in the second, and so on. The control of the last holding company is sufficient to control all; and such control, because of the scattering of stock among many small holders, may need the ownership of only 10% or 20% of the stock available.

See also trusttrust,
in law, arrangement whereby property legally owned by one person is administered for the benefit of another. Three parties are ordinarily needed for the relation to arise: the settlor, who bequeaths or deeds the property for another's benefit; the trustee, in whose hands
..... Click the link for more information. .

The Regulation of Corporations

Until 1844 incorporation in England continued to be a matter of special grant by the king or Parliament. New corporations were created in the Industrial Revolution to finance larger economic units, such as railways and steam-driven machinery in factories. In the United States the state legislatures became the chief authorities to grant charters to corporations, although the federal government incorporates in a limited field. Federal charters were granted to both of the Banks of the United States, to certain railroads after the Civil War, and to the Communications Satellite Corporation (Comsat). Corporations owned by the federal government and financed by government appropriations include the Federal Deposit Insurance Corporation, the Community Credit Corporation, and various corporations established to meet emergencies and later liquidated. At first states passed a special act for each incorporation, but in 1811, New York state enacted a general incorporation law enabling the secretary of state to give charters. Since the Dartmouth College CaseDartmouth College Case,
decided by the U.S. Supreme Court in 1819. The legislature of New Hampshire, in 1816, without the consent of the college trustees, amended the charter of 1769 to make Dartmouth College public. The trustees brought suit.
..... Click the link for more information. of 1819, when a charter was held to be a binding contract between a state and a corporation, unalterable and unamendable by the state without the corporation's consent, fewer perpetual charters have been granted, the right of the legislature to alter or annul being specifically reserved in the charter. Variability in state incorporation laws and the ability of corporations incorporated in one state to do business in all other states have allowed corporations to incorporate in the state or states having the most lenient incorporation laws. In general, the history of corporations in the United States has been marked by the abdication of state control over corporations.

Bibliography

See R. Sobel, The Age of Giant Corporations (1984); J. Davis, Corporations (1905, repr. 1986); W. Doran, The Business Corporation in the Democratic Society (1987); J. Bakan, The Corporation: The Pathological Pursuit of Profit and Power (2004).

Corporation

(1) In the Middle Ages a widespread form of organization of artisans and merchants (guilds). The Great French Revolution abolished guild corporations, whose monopoly position had hampered the development of the productive forces of capitalist society.

(2) An aggregate of individuals united for the achievement of some goal and forming an independent subject under the law (a juridical person).

The term “corporation” is most common in Anglo-American law. In the USA public corporations are accorded the rights of a juridical person (municipalities, for example, are considered public corporations), as are corporations of lawyers and so on. Private corporations in the USA correspond to joint-stock companies in the countries of Western Europe.

As a form of monopolistic joint-stock association, the corporation has become widespread in the USA as a result of the concentration and centralization of capital. The first corporations sprang up in railroad construction in the middle of the 19th century. By the early 20th century the corporation had become the main form of capitalist enterprise. Under contemporary conditions, corporations hold the key position in all sectors of the US economy: 98 percent of all income in manufacturing, 93 percent of the income in transportation and communication, and 76 percent of the income in domestic commerce. In 1968 the USA had 1,542,000 corporations with total assets of $2,216,-000,000,000, accounting for 83 percent of the income and 67 percent of the profits of all the enterprises of the country. The net profits of corporations reached $86,000,000,000 in 1968, double the 1960 level.

corporation

1. a group of people authorized by law to act as a legal personality and having its own powers, duties, and liabilities 2. the municipal authorities of a city or town 3. See public corporation

corporation

n. an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital. One benefit is that a corporation's liability for damages or debts is limited to its assets, so the shareholders and officers are protected from personal claims, unless they commit fraud. For private business corporations the Articles of Incorporation filed with the Secretary of State of the incorporating state must include certain information, including the name of the responsible party or parties (incorporators and agent for acceptance of service), the amount of stock it will be authorized to issue, and its purpose. In some states the purpose may be a general statement of any purpose allowed by law, while others require greater specificity. Corporation shareholders elect a board of directors, which in turn adopts bylaws, chooses the officers and hires top management (which in smaller corporations are often the directors and/or shareholders). Annual meetings are required of both the shareholders and the Board, and major policy decisions must be made by resolution of the Board (which often delegates much authority to officers and committees). Issuance of stock of less than $300,000, with no public solicitation and relatively few shareholders, is either automatically approved by the state commissioner of corporations or requires a petition outlining the financing. Some states are considered lax in supervision, have low filing fees and corporate taxes and are popular incorporation states, but corporations must register with Secretary of States of other states where they do substantial business as a "foreign" corporation. Larger stock offerings and/or those offered to the general public require approval by the Securities and Exchange Commission after close scrutiny and approval of a public "prospectus" which details the entire operation of the corporation. There are also non-profit (or not for profit) corporations organized for religious, educational, charitable or public service purposes. Public corporations are those formed by a municipal, state or federal government for public purposes such as operating a dam and utility project. A close corporation is made up of a handful of shareholders with a working or familial connection which is permitted to operate informally without resolutions and regular Board meetings. A de jure corporation is one that is formally operated under the law, while a de facto corporation is one which operates as if it were legal, but without the Articles of Incorporation being valid. Corporations can range from the Corner Mini-Mart to General Electric. (See: articles of incorporation, bylaws, board of directors, close corporation, public corporation, de jure corporation, de facto corporation, shareholder, stock, securities)

corporation

a group of persons who are deemed in law to be a single legal entity. The corporate entity is legally distinct from its members; it has legal personality and can hold property, sue and be sued in its own name as if it were a natural person. See COMPANY.

CORPORATION. An aggregate corporation is an ideal body, created by law, composed of individuals united under a common name, the members of which succeed each other, so that the body continues the same, notwithstanding the changes of the individuals who compose it, and which for certain purposes is considered as a natural person. Browne's Civ. Law, 99; Civ. Code of Lo. art. 418; 2 Kent's Com. 215. Mr. Kyd, (Corpor. vol. 1, p. 13,) defines a corporation as follows: "A corporation, or body politic, or body incorporate, is a collection of many; individuals united in one body, under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law, with a capacity of acting in several respects as an individual, particularly of taking and granting property, 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." In the case of Dartmouth College against Woodward, 4 Wheat. Rep. 626, Chief Justice Marshall describes a corporation to be "an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law," continues the judge, "it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and if the expression may be allowed, individuality properties by which a perpetual succession of many persons are considered, as the same, and may act as the single individual, They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyance for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use." See 2 Bl. Corn. 37.
2. The words corporation and incorporation are frequently confounded, particularly in the old books. The distinction between them is, however, obvious; the one is the institution itself, the other the act by which the institution is created.
3. Corporations are divided into public and private.
4. Public corporations, which are also called political, and sometimes municipal corporations, are those which have for their object the government of a portion of the state; Civil Code of Lo. art. 420 and although in such case it involves some private interests, yet, as it is endowed with a portion of political power, the term public has been deemed appropriate.
5. Another class of public corporations are those which are founded for public, though not for political or municipal purposes, and the, whole interest in which belongs to the government. The Bank of Philadelphia, for example, if the whole stock belonged exclusively to the government, would be a public corporation; but inasmuch as there are other owners of the stock, it is a private corporation. Domat's Civil Law, 452 4 Wheat. R. 668; 9 Wheat. R. 907 8 M'Cord's R. 377 1 Hawk's R. 36; 2 Kent's Corn. 222.
6. Nations or states, are denominated by publicists, bodies politic, and are said to have their affairs and interests, and to deliberate and resolve, in common. They thus become as moral persons, having an understanding and will peculiar to themselves, and are susceptible of obligations and laws. Vattel, 49. In this extensive sense the United States may be termed a corporation; and so may each state singly. Per Iredell, J. 3 Dall. 447.
7. Private corporations. In the popular meaning of the term, nearly every corporation is public, inasmuch as they are created for the public benefit; but if the whole interest does not belong to the government, or if the corporation is not created for the administration of political or municipal power, the corporation is private. A bank, for instance, may be created by the government for its own uses; but if the stock is owned by private persons, it is a private corporation, although it is created by the government, and its operations partake of a private nature. 9 Wheat. R. 907. The rule is the same in the case of canal, bridge, turnpike, insurance companies, and the like. Charitable or literary corporations, founded by private benefaction, are in point of law private corporations, though dedicated to public charity, or for the general promotion of learning. Ang. & Ames on Corp. 22.
8. Private corporations are divided into ecclesiastical and lay.
9. Ecclesiastical corporations, in the United States, are commonly called religious corporations they are created to enable religious societies to manage with more facility and advantage, the temporalities belonging to the church or congregation.
10. Lay corporations are divided into civil and eleemosynary. Civil corporations are created for an infinite variety of temporal purposes, such as affording facilities for obtaining loans of money; the making of canals, turnpike roads, and the like. And also such as are established for the advancement of learning. 1 Bl. Com. 471.
11. Eleemosynary corporations are such as are instituted upon a principle of charity, their object being the perpetual distribution of the bounty of the founder of them, to such persons as he has directed. Of this kind are hospitals for the relief of the impotent, indigent and sick, or deaf and dumb. 1 Kyd on Corp. 26; 4 Conn. R. 272; Angell & A. on Corp. 26.
12. Corporations, considered in another point of view, are either sole or aggregate.
13. A sole corporation, as its name implies, consists of only one person, to whom and his successors belongs that legal perpetuity, the enjoyment of which is denied to all natural persons. 1 Black Com. 469. Those corporations are not common in the United States. In those states, however, where the religious establishment of the church of England was adopted, when they were colonies, together with the common law on that subject, the minister of the parish was seised of the freehold, as persona ecclesiae, in the same manner as in England; and the right of his successors to the freehold being thus established was not destroyed by the abolition of the regal government, nor can it be divested even by an act of the state legislature. 9 Cranch, 828.
14. A sole corporation cannot take personal property in succession; its corporate capacity of taking property is confined altogether to real estate. 9 Cranch, 43.
15. An aggregate corporation consists of several persons, who are' united in one society, which is continued by a succession of members. Of this kind are the mayor or commonalty of a city; the heads and fellows of a college; the members of trading companies, and the like. 1 Kyd on Corp. 76; 2 Kent's Com. 221 Ang. & A. on Corp. 20. See, generally, Bouv. Inst. Index, h.t.

corporation

cor·po·ra·tion

corporation

cor•po•ra•tion

corporation

corporation

corporate

corporation

corporation,

The Modern Corporation

The Regulation of Corporations

Bibliography

Corporation

corporation

corporation

corporation

corporation

corporation

Corporation

Corporation

corporation

corporation

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corporation

Corporation

corporation

Synonyms for corporation

noun business

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noun town council

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Synonyms for corporation

noun a commercial organization

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Synonyms for corporation

noun a business firm whose articles of incorporation have been approved in some state

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noun slang for a paunch

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