en.wikipedia.org/wiki/Corporation
Civil law systems may refer to corporations as "moral persons"; they may also go by the name "AS" (anonymous society) or something similar, depending on language (see below).
AC 705, where Lord Haldane said: "My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation."
due diligence already exercised by institutional and other large investors, and the availability of insurance, it is questionable whether added liability would increase the costs of determining risk sufficiently to impair the liquidiy of the stock market). In any event, a lender or other creditor can require a personal guarantee on a loan to a corporation (normally a small corporation), thus introducing personal liability. The assets and structure of the corporation exist beyond the lifetime of any of its shareholders, officers or directors.
It is important to note that the "perpetual lifetime" feature is an indication of the unbounded potential duration of the corporation's existence, and its accumulation of wealth and thus power. In Anglo-American jurisdictions, business corporations are generally required to serve the best interests of the shareholders, a rule that courts have interpreted to mean the maximization of share value, and thus profits. Corporate directors are prohibited by corporate law from sacrificing profits to serve some other interest, including such areas as environmental protection, or the improvement of the welfare of the community.
Mr Dodge succeeded and went on to form his own car company with the proceeds of the suit. Modern corporate law is settled and clear that corporate directors are only allowed to act in the best interests of the corporation, and that this means maximization of profits (see for example JA VanDuzer The Law of Partnerships and Corporations (Irwin Law: 2003, Toronto) at pp. Corporations may be able to make charitable contributions to society, but only where this will enable profit maximization (eg if the public relations value of the contribution would boost profits more than any other potential use of the funds).
In return for lending money to the corporation, creditors can demand a control interest analogous to that of a shareholder, including one or more seats on the board of directors. Creditors are not said to "own" the corporation as shareholders do, but can outweigh the shareholders in practice, especially if the corporation is experiencing financial difficulties and cannot survive without credit. Shareholders in a corporation are said to have a "residual interest." Should the corporation end its existence, the shareholders are the last to receive its assets, following creditors and others with interests in the corporation. however, the risk is outweighed by the corporation's limited liability, which ensures that the shareholder will only be liable for the amount they invested.
Today, corporations are usually registered with the state, province, or federal government and become regulated by the laws enacted by that government. Registration is the main prerequisite to the corporation's assumption of limited liability.
articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors.
bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions. The law of the jurisdiction in which a corporation operates will regulate most of its internal activities, as well as its finances.
edit Naming Corporations generally have a distinct name. Historically, corporations were named after their membership: for instance, "The President and Fellows of Harvard College." Nowadays, corporations in most jurisdictions have a distinct name that does not need to make reference to their membership. In Canada, this possibility is taken to its logical extreme: many smaller Canadian corporations have no names at all, merely numbers (eg, "Ontario 123-4567 Limited").
liability remains limited, in the sense that it does not reach back to the persons who constitute the entity; one can only collect from whatever assets the entity still controls at the time one obtains a judgment against it.
edit Unresolved issues The nature of the corporation continues to evolve, both through existing corporations pushing new ideas and structures, courts responding, and governments regulating in response to new situations. A question of long standing is that of diffused responsibility: for example, if the corporation is found liable for a death, then how should the blame and punishment for this be allocated across the shareholders, directors, management and staff of the corporation, and the corporation itself?
The present law differs among jurisdictions, and is in a state of flux. Some argue that the owners of the business - the shareholders - should be ultimately responsible for such circumstances, but the modern corporation may have many millions of small-scale shareholders who know nothing about its business activities.
hedge funds - may rapidly turn over their partial ownership of a corporation many times a day. One position is that the directors should be passed the burden of moral and legal responsibility as part of their job of representing the shareholders. Another position is that the artificial entity of the corporation itself should be held liable, in accordance with the model of a corporation as a natural person. In some jurisdictions, both directors and the corporation are liable for certain offences (see, for example, the Canadian province of Ontario's Environmental Protection Act). The issue of corporate repeat offenders (see HGlasbeak, "Wealth by Stealth: Corporate Crime, Corporate Law, and the Perversion of Democracy" (Between the lines press: Toronto 2002) raises the question of the so-called "death penalty for corporations."
edit Pre-modern corporations Corporations have been present in some forms as far back as Ancient Rome. Although devoid of some of the core characteristics by which corporations are known today, they nonetheless were enterprises, sanctioned by the state, with a form of shareholders who invested money for a specific purpose.
Christianity and the influx of Germanic tribes, the Roman conception of the corporation merged with other views. Germanic tribes, for example, maintained that a group entity in and of itself could have a separate identity from that of its members. These influences came together in the body of canon law built around the conception of the church as corporate structure in the Middle Ages. Different theories of the church as corporate body were favored by different individuals but all agreed on one key component: that the church was more than just its members and could maintain an existence perpetually, regardless of the death of any individual member.
Older corporate entities gained incorporation as "the person/people of xx". This reflected the people who made up the "body" and also emphasised their legal identity.
United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focussed on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature. Investors generally had to be given an equal say in corporate governance, and corporations were required to comply with the purposes expressed in their charters.
Delaware followed, and soon became known as the most corporation-friendly state in the country; even today, most major public corporations are set up under Delaware law.
World War I (the advantage to the overall economy of enabling laws must, however, be viewed in light of the success of Carnegie Steel and Standard Oil, the economic stimulus of the war, the flourishing of the automotive sector, and oth...
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