What is Corporation?

Legal Definition
A corporation is a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law. Early incorporated entities were established by charter (i.e. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration.

Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered into two kinds: by whether or not they can issue stock, or by whether or not they are for profit.

Where local law distinguishes corporations by ability to issue stock, corporations allowed to do so are referred to as "stock corporations", ownership of the corporation is through stock, and owners of stock are referred to as "stockholders" or "shareholders." Corporations not allowed to issue stock are referred to as "non-stock" corporations; those who are considered the owners of the corporation are those who have obtained membership in the corporation, and are referred to as a "member" of the corporation.

Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit" and "not-for-profit" corporations, respectively.

There is some overlap between stock/non-stock and for profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for profit corporation is almost always a stock corporation, but some for profit corporations may choose to be non-stock. To simplify the explanation, whenever "Stockholder" or "Shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for profit, non-stock corporation.

Registered corporations have legal personality and are owned by shareholders whose liability is limited to their investment. Shareholders do not typically actively manage a corporation; shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity.

In American English, the word corporation is most often used to describe large business corporations. In British English and in the Commonwealth countries, the term company is more widely used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity.

Despite not being individual human beings, corporations, as far as the law is concerned, are legal persons, and have many of the same rights and responsibilities as natural persons do. Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations. Corporations can be "dissolved" either by statutory operation, order of court, or voluntary action on the part of shareholders. Insolvency may result in a form of corporate failure, when creditors force the liquidation and dissolution of the corporation under court order, but it most often results in a restructuring of corporate holdings. Corporations can even be convicted of criminal offenses, such as fraud and manslaughter. However, corporations are not considered living entities in the way that humans are.

Late in the 19th century, a new form of company having the limited liability protections of a corporation, and the more favorable tax treatment of either a sole proprietorship or partnership was developed. While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock. In Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH. In the last quarter of the 20th Century this new form of non-corporate organization became available in the United States and other countries, and was known as the limited liability company or LLC. Since the GmbH and LLC forms of organization are technically not corporations (even though they have many of the features of one) they will not be discussed in this article.
-- Wikipedia
Legal Definition
An entity created in accordance with legal rules that acts as a single (fictional) person. A corporation may sue and be sued, lend, borrow, issue stock, exist indefinitely, and act in many other ways distinct from the shareholders who own it and the managers who run it. Each U.S. state can create rules by which new corporations are formed (i.e., rules of incorporation).

See Artificial person and Natural person.
Legal Definition
A corporation is a legal entity created through the laws of its state of incorporation. Individual states have the power to promulgate laws relating to the creation, organization and dissolution of corporations. Many states follow the Model Business Corporation Act. (See Minnesota's adoption.) State corporation laws require articles of incorporation to document the corporation's creation and to provide provisions regarding the management of internal affairs. Most state corporation statutes also operate under the assumption that each corporation will adopt bylaws to define the rights and obligations of officers, persons and groups within its structure. States also have registration laws requiring corporations that incorporate in other states to request permission to do in-state business.

There has also been a significant component of Federal corporations law since Congress passed the Securities Act of 1933, which regulates how corporate securities are issued and sold. Federal securities law also governs requirements of fiduciary conduct such as requiring corporations to make full disclosures to shareholders and investors.

The law treats a corporation as a legal "person" that has standing to sue and be sued, distinct from its stockholders. The legal independence of a corporation prevents shareholders from being personally liable for corporate debts. It also allows stockholders to sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. The legal "person" status of corporations gives the business perpetual life; deaths of officials or stockholders do not alter the corporation's structure.

Corporations are taxable entities that fall under a different scheme from individuals. Although corporations have a "double tax" problem -- both corporate profits and shareholder dividends are taxed -- corporate profits are taxed at a lower rate than the rates for individuals.

Corporate law has important intersections with contracts and commercial transactions law.
Legal Definition
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 necessityof 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 agregate.

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 Crancb, 43.

15. An aggregate corporation cousists 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.
-- Bouviers Law Dictionary
Legal Definition
An artificial person or legal entity created by or under the authority of the laws of a state or nation, composed, in some rare instances, of a single person and his successors, being the incumbsnts of a particular office, but ordinarily consisting of an association of numerous individuals, who subsist as a body politic under a special denomination, which is regarded In law as having a personality and existence distinct from that of its several members, and which is, by,the same authority, vested with the capacity of continuous succession, irrespective of changes in its membership, either in perpetuity or for a limited term of years, and of acting as a unit or single individual in matters relating to the common purpose of the association, within the scope of the powers and authorities cohferred upon such bodies by law. See Case of Sutton's Hospital, 10 Coke, 32; Dartmouth College v. Woodward, 4 Wheat 518, 636, 657, 4 In Ed. 629; U. S. v. Trinidad Coal Co., 137 U. S. 160, 11 Sup. Ct. 57, 34 In Ed. 640; Andrews Bros. Co. v. Youngstown Coke Co, 86 Fed. 585, 30 C. C. A. 293; Porter v. Railroad Co., 76 111. 573; State v. Payne, 129 Mo. 468, 31 S. W. 707, 33 In R. A. 576; Farmers' L. & T. Co. v. New York, 7 Hill artificial person or being, endowed by law with the capacity of perpetual succession; consisting either of a single individual, (termed a "corporation sole,") or of a collection of several individuals, (which is termed a "corporation aggregate.") 3 Steph. Comm. 166; 1 Bl. Comm. 467, 469. A corporation is an intellectual body, created by law, composed of individuals imited under a common name, the members of which sucoeed each other, so that the body continues always the same, notwithstanding the change of the individuals who compose it, and which, for certain purposes, is considered a natural person. Civil Code La. art. 427. Classification. According to the accepted definitions and rules, corporations are classified as follows: Public and private. A public corporation is one created by the state for political purposes and to act as an agency In the administration of civil government, generally within a particular territory or subdivision of the state, and usually invested, for that purpose, with subordinate and local powers of legislation; such as a county, city, town, or school district. These are also sometimes called "political corporations." People v. McAdams, 82 III. 356; Wooster v. Plymouth, 62 N. H. 208; Goodwin v. East Hartford, 70 Conn. 18, 38 Atl. 876; Dean v. Davis, 51 Cal. 409; Regents v. Williams, 9 Gill & J. (Md.) 401, 31 Am. Dec. 72 ; Ten Eyck v. Canal Co., 18 N. J. Law, 200, 37 Am. Dec. 233; Toledo Bank v. Bond, 1 Ohio St. 622; Murphy v. Mercer County, 57 N. J. Law, 245, 31 Atl. 229. Private corporations are those founded by and composed of private individuals, for private purposes, as distinguished from governmental purposes, and having no political or governmental franchises or duties. Santa Clara County v. Southern Pac. It. Co. (C. C.) 18 Fed. 402; Swan v. Wliliams, 2 Mich. 434; People v. McAdamS, 82 III. 361; McKim v. Odom, 3 Bland (Md.) 418; Rundle v. Canal Co., 21 Fed. Cas. 6. The true distinction between public and private corporations is that the former are organized for governmental purposes, the latter not. The term "public" has sometimes been applied to corporations of which the government owned the entire stock, as in the case of a state bank. But bearing in mind that "public" is here equiv-alent to "political," it will be apparent that this is a misnomer. Again the fact that the business or operations of a corporation may directly and very extensively affect the general public (as in the case of a railroad company or a bank or an insurance company) is no reason for calling it a public corporation. If organized by private persons for their own advantage,—or even if organized for the banefit of the public generally, as in the case of a free public hospital or other charitable institution,—it is none the less a private corporation, if it does not possess governmental powers or functions. The uses may in a sense be called "public," but the corporation is "private," as much so as if the franchises were vested in a single person. Dartmouth College v. Woodward, 4 Wheat. 562, 4 In Ed. 629; Ten Eyck v. Canal Co., 18 N. J. Law, 204, 37 Am. Dec. 233. It is to be observed, however, that those corporations which serve the public or contribute to the comfort and convenience of the general public, though owned and managed by private interests, are now (and quite appropriately) denominated "public-service corporations." See infra. Another distinction between public and private corporations is that the former are not voluntary associations (as the latter are) and that there is no contractual relation between the government and a public corporation or between the individuals who compose it. Mor. Priv. Corp. § 3; Goodwin v. East Hartford, 70 Conn. 18, 38 Atl. 876. The terms "public" and "municipal," as applied to corporations, are not convertible. All municipal corporations are public, but not vice versa. Strictly speaking, only cities and towns are "municipal" corporations, though the term is very commonly so employed as to include also counties and such governmental agencies as school districte and road districts. Brown v. Board of Education, 108 Ky. 783, 57 S. W. 612. But there may also be "public" corporations which are not "inunicipal" even in this wider sense of the latter term. Such, according to some of the authorities, are the "irrigation districts" now known in several of the western states. Irrigation Dist. v. Collins, 46 Neb. 411, 64 N. W. 1086 ; Irrigation Dist. v. Peterson, 4 Wash. 147, 29 Pac. 995. Compare Herring v. Irrigation Dist. (C. C.) 95 Fed. 705. Ecclesiastical and lay. In the English law, all corporations private are divided into ecclesiastical and lay, the former being such corporations as are composed exclusively of ecclesiastica organized for spiritual purposes, or for administering property held for religious uses, such as bishops and certain other dignitaries of the church and (formerly) abbeys and monasteries. 1 Bl. Comm. 470. Lay corporations are those composed of laymen, and existing for secular or business purposes. This distinction is not recognized in American law. Co.rporations formed for the purpose of maintaining or propagating religion or of supporting public religious services, according to the rites of particular denominations, and incidentally owning and administering real and personal property for religious uses, are called "religious corporations," as distinguished from business corporations; but they are "lay" corporations, and not "ecclesiastical" in the sense of the English law. Robertson v. Bullions, 11 N. Y. 243. Eleemosynary and civil. Lay corporations are classified as "eleemosynary" and "civil;" the former being such as are created for the distribution of alms or for the administration of charities or for purposes falling under the description of "charitable" in its widest sense, including hospitals, asylums, and colleges; the latter being organized for the facilitating of business transactions and the profit or advantage of the members. 1 Bl. Comm. 471; Dartmouth College v. Woodward, 4 Wheat 660, 4 L. Ed. 629. In the law of Louisiana, the term "civil" as applied to corporations, is used in a different sense, being contrasted with "religious." Civil corporations are those which relate to temporal police; such are the corporations of the cities, the companies for the advancement of commerce and agriculture, literary societies, colleges or universities founded for the instruction of youth, and the like. Religious corporations are those whose establishment relates only to religion; such are the congregations of the different religious persuasions. Civ. Co.de La. art 431. Aggregate and sole. A corporation sole is one consisting of one person only, and his successors in some particular station, who are incorporated by law in order to give them some legal capacities and advantages, particularly that of perpetuity, which in their natural persons they could not have had. In this sense, the sovereign in England Is a sole corporation, so is a bishop, so are some deans distinct from their several chapters, and so is every parson and vicar. 3 Steph. Comm. 168, 369; 2 Kent, Comm. 273. Warner v. Beers, 23 Wend. (N. Y.) 172; Codd v. Rath-bone, 19 N. Y. 39; First Parish v. Dunning, 7 Mass. 447. A corporation aggregate is one composed of a number of individuals vested with corporate powers; and a "corporation," as the word is used in general popniar and legal speech, and as defined at the head of this title, means a "corporation aggregate," Domestic and foreign. With reference to the laws and the courts of any given state, a "domestic" corporation is one created by, or organised under, the laws of that state; a "foreign" corporation is one created by or under the laws of another state, government, or country. In re Grand Lodge, 110 Pa. 613, 1 Atl. 582; Boley v. Trust Co., 12 Ohio St. 143; Bowen v. Bank, 34 How. Prae. (N. Y.) 411. Close and open. A "close" corporation is one in which the directors and officers have the power to fill vacancies in their own number, without allowing to the general body of stockholders any choice or vote in their election. An "open" corporation is one in which all the members or corporators have a vote in the election of the directors and other officers. McKim v. Odom, 3 Bland (Md.) 416. Other compound and descriptive terms.

A business corporation is one formed for the purpose of transacting business in the widest sense of that term, including not only trade and commerce, but manufacturing, mining, banking, insurance, transportation, and practically every form of commercial or industrial activity where the purpose of the organization is pecuniary profit; contrasted with religious, charitable, educational, and other like organizations, which are sometimes grouped in the statutory law of a state under the general designation of "corporations not for profit." Winter v. Railroad Co., 30 Fed. Cas. 329; In re Independent Ins. Co., 13 Fed. Cas. 13; McLeod v. College, 69 Neb. 550, 96 N. W. 265. Corporation de facto. One existing under color of law and in pursuance of an effort made in good faith to organize a corporation under the statute; an association of men claiming to be a legally incorporated company, and exercising the powers and functions of a corporation, but without actual lawful authority to do se. Foster v. Hare, 26 Tex. Civ. App. 177, 62 S. W. 541; Attorney General v. Stevens, 1 N. J. Eq. 378, 22 Am. Dee, 526; Manufacturing Co. v. Schofield, 28 Ind. App. 95, 62 N. E. 106; Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 234, 91 N. W. 1081; Johnson v. Okerstrom, 70 Minn. 303, 73 N. W. 147; Tuiare Irrig. Dist v. Shepard, 185 TJ. S. 1, 22 Sup. Ct. 531, 46 L. Ed. 773; In re Gibbs' Estate, 157 Pa. 59, 27 AU. 383, 22 In R. A. 276; Pape v. Bank, 20 Kan. 440, 27 Am. Rep. 183. Joint-stock corporation. This differs from a joint-stock company in being regularly incorporated, instead of being a mere partnership, but resembles it in having a capital divided into shares of stock. Most business corporations (as distinguished from eleemosynary corporations) are of this character. Moneyed corporations are, properly speaking, those dealing in money or in the business of receiving deposits, loaning money, and exchange; but in a wider sense the term is applied to all business corporations having a money capital and employing it in the conduct of their business. Mutual Ins. Co. v. Erie County, 4 N. Y. 444; Giliet v. Moody, 3 N. Y. 487; Vermont Stat. 1894, § 3674; Hill v. Reed, 16 Barb. (N, Y.) 287; In re California Pac. R. Co., 4 Fed. Cas. 1,060; Hobbs v. National Bank, 101 Fed. 75, 41 O. C. A. 205. Municipal corporations. See that title. Public-service corporations. Those whose operations serve the needs of the general public or conduce to the comfort and convenience of an entire community, such as rallroads, gas, water, and electric lig&t companies. The business of such companies is said to be "affected with a public interest," and for that reason they are subject to legislative regulation and control to a greater extent than corporations not of this character. Quasi corporations. Organizations resembling corporations; mimicipal societies or similar bodies which, though not true corporations in all respects, are yet recognized, by statutes or immemorial usage, as persons or aggregate corporations, with precise duties which may be enforced, and privileges which may be maintained, by suits at law. They may be considered quasi corporations, with limited powers, co-extensive with the duties imposed upon them by statute or usage, but restrained from a general use of the authority which belongs to those metaphysical persons by the common law. Scates v. King, 110 111. 456; Adams v. Wiscasset Bank, 1 Me. 361, 1 Am. Dec. 88; Lawrence County v. Railroad Co., 81 Ky. 227; Barnes v. District of Columbia, 91 U. S. 552, 23 L. Ed. 440. This term is lacking in definiteness and precision. It appears to be applied indiscriminately (a) to all kinds of municipal corporations, the word "quasi" being introduced because it is said that these are not voluntary organizations like private corporations, but created by the legislature for its own purposes and without reference to the wishes of the people of the territory affected ; (b) to all municipal corporations except cities and incorporated towns, the latter being considered the only true municipni corporations because they exist and act under charters or statutes of incorporation while counties, school districts, and the like are merely created or set off under general laws; (c) to municipal corporations possessing only a low order of corporate existence or the most limited range of corporate powers, such as hundreds in England, and counties, villages, and school districts in America. Quasi public corporation. This term is sometimes applied to corporations which are not strictly public, in the sense of being organized for governmental purposes, but whose operations contribute to the comfort, convenience, or welfare of the general public, such as telegraph and telephone companies, gas, water, and electric light companies, and irrigation companies. More commonly and more correctly styled "public-service corporations." See Wiemer v. Louisville Water Co. (C. C.) 130 Fed. 251; Cumberland Tel. Co. v. Evansville (C. C.) 127 Fed. 187; McKim v. Odom, 3 Bland (Md.) 419; Campbell v. Watson, 62 N. J. Eq. 396, 50 Atl. 120. Spiritual corporations. Corporations, the members of which are entirely spiritual persons, and incorporated as such, for the furtherance of religion and perpetuating the rights of the church. Trading corporations. A trading corporation is a commercial corporation engaged in buying and selling. The word "trading," is much narrower in scope than "business," as applied to corporations, and though a trading corporation is a business corporation, there are many business corporations which are not trading companies. Dartmouth College v. Woodward, 4 Wheat 669, 4 L. Ed. 629; Adams v. Railroad Co., 1 Fed. Cas. 92. Tramp corporations. Companies chartered in one state without any intention of doing business therein, but which carry on their business and operations wholly in other states. State v. Georgia Co., 112 N. C. 34, 17 S. E. 10, 19 In R. A. 485. Synonyms. The words "company" and "corporation" are commonly used as interchangeable terms. In strictness, however, a company is an association of persons for business or other purposes, embracing a considerable number of individuals, which may or may not be incorporated. In the former case, it is legally a partnership or a joint-stock company; in the latter case, it is properly called a "corporation." Goddard v. Railroad Co., 202 111. 362, 66 N. E. 1066; Bradley Fertilizer Co., v. South Pub. Co., 4 Misc. Rep. 172, 23 N. Y. Supp. 675; Com. v. Reinoehl, 163 Pa. 287, 29 Atl. 896, 25 L E. A. 247; State v. Mead, 27 Vt 722; Leader Printing Co. v. Lowry, 9 Okl. 89, 59 Pac. 242. For the particulars in which corporations differ from "Joint-Stock Companies" and "Partnerships," see those titles.
-- Black's Law Dictionary
Legal Definition
A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. See 17 U. S. 518, 4 L. Ed. 629.
-- Ballentine's Law Dictionary