Corporations are entities that act as a single fictitious person. Like a real person, a corporation can sue, be sued, lend and borrow. Learn more about Kindle Personal Document Service. Your email address will be used to notify you when the moderator has reviewed your comment and in case the authors of the article or the moderator need to contact you directly.
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Once the articles are approved, the directors of the corporation meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and positions of officials. The 20th century saw a proliferation of laws allowing corporations to be created by registration around the world, helping to drive economic booms in many countries before and after World War I. Failure to comply with these regulations could expose the corporation and even its owners and officers to liability and fines. The day-to-day activities of a corporation are usually controlled by individuals appointed by the members.
The precise legal definition of a corporation differs from one jurisdiction to another, but the most important characteristic of the corporation is always limited liability. Those who are considered owners of a corporation without shares are individuals (or other entities) who have obtained membership in the corporation and are called members of the corporation. Shareholders generally do not actively manage a corporation; instead, shareholders elect or appoint a board of directors to control the corporation in a fiduciary capacity. Described by both contemporaries and historians as the greatest trading society in the universe, the English East India Company would come to symbolize the corporation's dazzling and rich potential, as well as new business methods that could be both brutal and exploitative.
Another major shift after World War I was towards the development of conglomerates, in which large corporations bought smaller corporations to expand their industrial base. Public corporations are regulated by federal law, primarily through the Securities and Exchange Commission. In another type of corporation, the legal document established by the corporation or containing its current rules will determine the requirements for membership in the corporation. You may be inclined to assign the anonymous inventor of the principle of limited liability, as it applies to commercial corporations, a place of honor with Watt and Stephenson, and other pioneers of the Industrial Revolution.
The process of converting a private corporation into a public corporation is much more complex, as it is governed by federal laws that require full and public disclosure of financial information to prospective shareholders and the government. Public corporation means a county, city, village, municipality, port district, drainage district, special evaluation district, or metropolitan district of this state, or a board, commission, or other authority or agency created by or pursuant to an act of the legislature of this state. The point was that incorporation would outlive the life of any particular member, existing in perpetuity. .