A corporation is an institution that is granted a charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority , and that the recipient admits a limited (or inferior) status within the relationship, and it is within that sense that charters were recognizing it as a separate legal entity In the United States a Separate Legal Entity or SLE refers to a type of legal entity[disambiguation needed] with detached accountability. A business can be setup as a SLE to legally separate it from the individual or owner, such as a limited liability company or a corporation having its own privileges, and liabilities distinct from those of its members.^[1] There are many different forms of corporations, most of which are used to conduct business A business is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities. Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business.

Corporations exist as a product of corporate law Corporate law is the law of the most dominant kind of business enterprise in the modern world. Corporate law is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another under the internal rules of the firm, and their rules balance the interests of the management Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization or effort for the purpose of accomplishing a goal. Resourcing who operate the corporation, creditors A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption (usually enforced by contract) that the second party will return an equivalent property or service. The second, shareholders A mutual shareholder or stockholder is an individual or company that legally owns one or more shares of stock in a joint stock company. A company's shareholders collectively own that company and are the members of the company by signing the memorandum of association . Thus, the typical goal of such companies is to enhance shareholder value, and employees who contribute their labor Labour economics seeks to understand the functioning and dynamics of the market for labour. Labour markets function through the interaction of workers and employers. Labour economics looks at the suppliers of labour services , the demanders of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and.^[2] In modern times, corporations have become an increasingly dominant part of economic life.

An important feature of corporation is limited liability. If a corporation fails, shareholders normally only stand to lose their investment, and employees will lose their jobs, but neither will be further liable for debts that remain owing to the corporation's creditors.

Despite not being natural persons, corporations are recognized by the law to have rights and responsibilities like actual people. Corporations can exercise human rights Human rights are "rights and freedoms to which all humans are entitled." Proponents of the concept usually assert that everyone is endowed with certain entitlements merely by reason of being human against real individuals and the state,^[3] and they may be responsible for human rights violations.^[4] Just as they are "born" into existence through its members obtaining a certificate of incorporation A certificate of incorporation is a legal document relating to the formation of a company or corporation. It is a license to form a corporation issued by state government. Its precise meaning depends upon the legal system in which it is used, but the two primary meanings are:, they can "die" when they lose money into insolvency A business may be 'cash flow insolvent' but 'balance sheet solvent' if it holds illiquid assets, particularly against short term debt that it cannot immediately realise if called upon to do so. Conversely, a business can have negative net assets showing on its balance sheet but still be cash flow solvent if ongoing revenue is able to meet debt. Corporations can even be convicted of criminal offences, such as fraud The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain and manslaughter The law generally differentiates between levels of criminal culpability based on the mens rea, or state of mind. This is particularly true within the law of homicide, where murder requires either the intent to kill - a state of mind called malice, or malice aforethought - or the knowledge that one's actions are likely to result in death;.^[5]

Although corporate law varies in different jurisdictions, there are four core characteristics of the business corporation:^[6]

• Legal personality The term legal person is a concept in philosophy of law topics wherein an entity is regarded by law to be like a person with such status being granted legal rights to protections and/or privileges under law. It is a term found in business-corporate law and animal rights law contexts, wherein corporations are regarded as highly productive human
• Limited liability Limited liability is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. In other words, if a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a
• Transferable shares In financial markets, a share is a unit of account for various financial instruments including stocks , and investments in limited partnerships, and REITs. The common feature of all these is equity participation (limited in the case of preference shares)
• Centralized management under a board A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as board of trustees, board of governors, board of managers, or executive board. It is often simply referred to as "the board." structure

History

The word "corporation" derives from corpus, the Latin Latin or sometimes Roman is an Italic language originally spoken in Latium and Ancient Rome. Although often considered a dead language, in view of the fact that it has no native speakers, a small number of scholars can fluently speak it and it continues to be taught in schools and universities and has been, and currently is, used in the process of word for body, or a "body of people." Entities which carried on business and were the subjects of legal rights were found in ancient Rome, and the Maurya Empire The Maurya Empire was a geographically extensive and powerful empire in ancient India, ruled by the Mauryan dynasty from 321 to 185 BC. Originating from the kingdom of Magadha in the Indo-Gangetic plains in the eastern side of the Indian subcontinent, the empire had its capital city at Pataliputra (modern Patna). The Empire was founded in 322 BC in ancient India.^[7] In medieval Europe, churches became incorporated, as did local governments, such as the Pope The Pope (from Latin: papa; from Greek: πάππας, a child's word for father) is the Bishop of Rome, a position that makes him the leader of the worldwide Catholic Church (that is, the Latin Rite and the Eastern Catholic Churches in full communion with the see of Rome). The current office-holder is Pope Benedict XVI, who was elected in a papal and the City of London Corporation The City of London Corporation is the municipal governing body of the City of London. It exercises control only over the City (the "Square Mile", so called for its approximate area), and not over Greater London. It has three main aims: to promote the city as the world's leading international financial and business centre; to provide. The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity. The alleged oldest commercial corporation in the world, the Stora Kopparberg The Great Copper Mountain was a mine in Falun, Sweden, that operated for a millennium from the 10th century to 1992. It produced as much as two thirds of Europe's copper needs and helped fund many of Sweden's wars in the 17th century. Technological developments at the mine had a profound influence on mining globally for two centuries. Since 2001 mining community in Falun Falun is a city and the seat of Falun Municipality in Dalarna County, Sweden, with 36,447 inhabitants in 2005. It is also the capital of Dalarna County. Falun forms, together with Borlänge, a metropolitan area with close to 100,000 inhabitants, Sweden Sweden (pronounced /ˈswiːdən/ SWEE-dən, Swedish: Sverige pronounced [ˈsveːrijə] ( listen)), officially the Kingdom of Sweden (Swedish: Konungariket Sverige (help·info)), is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden has land borders with Norway to the west and Finland to the northeast, and water borders with, obtained a charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority , and that the recipient admits a limited (or inferior) status within the relationship, and it is within that sense that charters were from King Magnus Eriksson Magnus , son of Henry (known as Magnus Henriksson or Magnus Henriksen), was a Danish lord and the king of Sweden between 1160 and 1161, being afterwards treated as usurper in 1347. Many European nations chartered corporations to lead colonial ventures, such as the Dutch East India Company The Dutch East India Company was a chartered company established in 1602, when the States-General of the Netherlands granted it a 21-year monopoly to carry out colonial activities in Asia. It was the first multinational corporation in the world and the first company to issue stock. It was also arguably the world's first megacorporation, possessing or the Hudson's Bay Company The Hudson's Bay Company , abbreviated HBC, is the oldest commercial corporation in North America and one of the oldest in the world. The company was incorporated by British royal charter in 1670 as The Governor and Company of Adventurers of England trading into Hudson's Bay; it is now domiciled in Canada and has adopted the more common shorter, and these corporations came to play a large part in the history of corporate colonialism Colonialism is the building and maintaining of colonies in one territory by people from another territory. Sovereignty over the colony is claimed by the metropole. Social structure, government and economics within the territory of the colony are changed by the colonists.

During the period of colonial expansion in the seventeenth century, the true progenitors of the modern Corporation emerged as the "chartered company". Acting under a charter sanctioned by the Dutch monarch, the Dutch East India Company The Dutch East India Company was a chartered company established in 1602, when the States-General of the Netherlands granted it a 21-year monopoly to carry out colonial activities in Asia. It was the first multinational corporation in the world and the first company to issue stock. It was also arguably the world's first megacorporation, possessing (VOC), defeated Portuguese Portugal /ˈpɔɹtʃʉɡəl/ (Portuguese: Portugal, Mirandese: Pertual), officially the Portuguese Republic (Portuguese: República Portuguesa; Mirandese: República Pertuesa), is a country located in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe and is bordered by the Atlantic Ocean to the west and forces and established itself in the Moluccan Islands in order to profit from the European Europe is one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally divided from Asia to its east by the water divide of the Ural Mountains, the Ural River, the Caspian Sea, the Caucasus region (Specification of borders) and the Black Sea to the southeast. Europe is bordered by the Arctic Ocean and demand for spices A spice is a dried seed, fruit, root, bark, or vegetative substance used in nutritionally insignificant quantities as a food additive for flavor, color, or as a preservative that kills harmful bacteria or prevents their growth. In the kitchen, spices are distinguished from herbs, which are leafy, green plant parts used for flavoring. Investors in the VOC were issued paper certificates as proof of share ownership, and were able to trade their shares on the original Amsterdam Amsterdam (pronounced /ˈæmstərdæm/; Dutch [ɑmstərˈdɑm] ) is the capital and largest city of the Netherlands, located in the province of North Holland in the west of the country. The city, which had a population (including suburbs) of 1.36 million on 1 January 2008, comprises the northern part of the Randstad, the sixth-largest metropolitan stock exchange. Shareholders are also explicitly granted limited liability Limited liability is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. In other words, if a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a in the company's royal charter.^[8] In the late eighteenth century, Stewart Kyd, the author of the first treatise on corporate law Corporate law is the law of the most dominant kind of business enterprise in the modern world. Corporate law is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another under the internal rules of the firm in English, defined a corporation as,

a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested, by policy of the law, with the capacity of acting, in several respects, as an individual, particularly of taking and granting property, of 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. —^[9]

Mercantilism

Labeled by both contemporaries and historians as "the grandest society of merchants in the universe",^{[citation needed]} the British East India Company The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China. The oldest among several similarly formed European East India Companies, the Company was granted an English Royal Charter, under the name would come to symbolize the dazzlingly rich potential of the corporation, as well as new methods of business that could be both brutal and exploitive.^[10] On 31 December 1600, the English monarchy The monarchy of the United Kingdom is the constitutional monarchy of the United Kingdom and its overseas territories. The present monarch, Elizabeth II, has reigned since 6 February 1952. She and her immediate family undertake various official, ceremonial and representational duties. As a constitutional monarch, the Queen is limited to non- granted the company a fifteen-year monopoly on trade to and from the East Indies East Indies was a term used in from 1600 onwards for what is now known as Southeast Asia, and predominantly for the islands of Maritime Southeast Asia. The term is sometimes used to refer to all of Southeast Asia that came under Indian influence. It was contrasted with the West Indies and Africa Africa is the world's second-largest and second most-populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area. With a billion people (as of 2009, see table) in 61 territories, it accounts for about 14.72% of the world's human population. By 1611, shareholders in the East India Company were earning an almost 150% return on their investment In finance, rate of return , also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/. Subsequent stock offerings demonstrated just how lucrative the Company had become. Its first stock offering in 1613-1616 raised ₤418,000, and its first offering in 1617-1622 raised ₤1.6 million.^[11]

In the United States ^ b. English is the de facto language of American government and the sole language spoken at home by 80% of Americans age five and older. Spanish is the second most commonly spoken language, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focused 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. Many private firms in the 19th century avoided the corporate model for these reasons (Andrew Carnegie Andrew Carnegie (25 November 1835 – 11 August 1919) was a Scottish-American industrialist, businessman, entrepreneur and a major philanthropist formed his steel operation as a limited partnership, and John D. Rockefeller set up Standard Oil as a trust). Eventually, state governments began to realize the greater corporate registration revenues available by providing more permissive corporate laws. New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state.^[12] Delaware followed, and soon became known as the most corporation-friendly state in the country after New Jersey raised taxes on the corporations, driving them out. New Jersey reduced these taxes after this mistake was realized, but by then it was too late; even today, most major public corporations are set up under Delaware law.

By the beginning of the 19th century, government policy on both sides of the Atlantic began to change, reflecting the growing popularity of the proposition that corporations were riding the economic wave of the future. In 1819, the U.S. Supreme Court granted corporations a plethora of rights they had not previously recognized or enjoyed.^[13] Corporate charters were deemed "inviolable", and not subject to arbitrary amendment or abolition by state governments.^[14] The Corporation as a whole was labeled an "artificial person," possessing both individuality and immortality.^[15]

At around the same time, British legislation was similarly freeing the corporation from the shackles of historical restrictions. In 1844 the British Parliament passed the Joint Stock Companies Act, which allowed companies to incorporate without a royal charter or an Act of Parliament.^[16] Ten years later, limited liability, the key provision of modern corporate law, passed into English law: in response to increasing pressure from newly emerging capital interests, Parliament passed the Limited Liability Act of 1855, which established the principle that any corporation could enjoy limited legal liability on both contract and tort claims simply by registering as a "limited" company with the appropriate government agency.^[17]

This prompted the English periodical The Economist to write in 1855 that "never, perhaps, was a change so vehemently and generally demanded, of which the importance was so much overrated."^[18] The glaring inaccuracy of the second part of this judgment was recognized by the same magazine more than 75 years later, when it claimed that, "[t]he economic historian of the future . . . may be inclined to assign to the nameless inventor of the principle of limited liability, as applied to trading corporations, a place of honour with Watt and Stephenson, and other pioneers of the Industrial Revolution."^[19]

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