An incorporated entity is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Incorporated entities have legal rights and liabilities that are distinct from its shareholders, and may conduct business for either profit-seeking business or not for profit purposes. 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. In addition to legal personality, registered companies tend to have limited liability, be owned by shareholders who can transfer their shares to others, and controlled by a board of directors who the shareholders appoint.
In American English the word corporation is widely used to describe incorporated entities, especially those that have a large number of shareholders, and in respect of which, ownership can be transferred without the need for the consent of other shareholders. In British English and in the commonwealth countries, the term public company is more widely used to describe the same sort of entity while the word company 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 natural persons, corporations are recognized by the law to have rights and responsibilities like natural persons ("people"). 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.
Read more about Corporation: History, Ownership and Control, Corporate Law, Closely Held Corporations and Publicly Traded Corporations, Benefit Corporation, Corporations Globally, Corporate Taxation, Criticisms, Other Business Entities
Famous quotes containing the word corporation:
“The nearest the modern general or admiral comes to a small-arms encounter of any sort is at a duck hunt in the company of corporation executives at the retreat of Continental Motors, Inc.”
—C. Wright Mills (19161962)
“It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience.”
—Henry David Thoreau (18171862)
“What I am anxious to do is to get the best bill possible with the least amount of friction.... I wish to avoid [splitting our party]. I shall do all in my power to retain the corporation tax as it is now and also force a reduction of the [tariff] schedules. It is only when all other efforts fail that Ill resort to headlines and force the people into this fight.”
—William Howard Taft (18571930)