A corporation refers to a commercial entity, and can be for profit, non-profit, voluntary or public corporations. Corporations enjoy many of the same rights as individual people. They can own property, sign contracts, and have certain constitutional rights.
The main features of incorporation are limited liability, and a perpetual lifetime. Limited liability means that the corporation members cannot lose more than they contributed. A perpetual lifetime allows the assets and structures of the corporation to exist beyond the lifetime of its members.
Forming a corporation
Corporations are generally registered with the state or federal government, and are regulated by the laws of that government. Articles of incorporation are filed with the government that state the nature of the business, the amount of stock they are authorized to issue, and the names and addresses of the officers. The corporation must have a distinct name. In Canada, some corporations have chosen numbers instead of names.
Corporations appear in many forms, performing many business and non-profit activities. For-profit and non-profit laws may differ, however, the underlying structures are often similar. There are privately held and publicly held corporations. Publicly held corporations offer the sale of stock to the public. Multinational corporations are those that have grown outside its national boundaries.
As far back as ancient Rome, corporations existed. Although they did not have all of the same characteristics of today’s corporations, they were sanctioned by the state, and had shareholders who invested in the venture. Early corporations were often formed to undertake tasks that were viewed as too expensive, or too risky, for one person. Early American corporations were very closely regulated. Many private firms avoided the corporate model until laws became more permissive.