Though corporations are routinely mentioned in the media, few people know the difference between a corporation and an ordinary business. Corporations exist as a separate legal entity, a product of corporate law. The goal is to balance the interests of the employees working for them and the shareholders who invest in them. Corporations have increasingly dominated economic life in modern times, with people relying on them for goods and services, employment, social development and economic growth.
The major defining feature of a corporation is that it's legally independent of the people who've created and are part of it. When corporations fail, employees lose their jobs and shareholders lose their investment. However, neither of them are liable for the corporation's debts. This rule, called limited liability, is why corporations tend to have an abbreviation, such as Inc., Ltd., or Plc. after their names. Despite the fact that they're not really people, corporations are recognized as having responsibilities and rights in the same way as people. They can be responsible for human rights violations and can exercise rights against the state and individuals. They can even be convicted of criminal offenses.
The etymology of the word corporation stems from "corpus" which is Latin for "body." This reflects the fact corporations are entities that enjoy legal rights. Churches and local governments in medieval Europe were also incorporated. The goal was for the incorporation to last forever, surviving longer than any particularly member. The Stora Kopparberg mining community in Falun, Sweden may be the oldest commercial corporation in the world, having obtained its charter from King Magnus Eriksson in the 1300s. The Hudson's Bay Company and Dutch East India Company are examples of corporations chartered by European countries to lead colonial endeavors.
During the Colonial expansion of the 17th century, a variant of the modern coporation emerged. This variant was the chartered company. A prime, a powerful, example was the Dutch East India Company. Investors in this company had paper certificates that acted as proof of ownership. They could trade these shares on the original stock exchange in Amsterdam, and were explicitly granted a form of the modern limited liability in the royal charter for the company.
As the chartering of corporation began to fall from favor, governments began to more closely regulate these companies. Investors were required to be given an equal say in the governance of the corporation, and corporations were required to comply with the purposes their charters expressed. Because of this, many of the century's most famous businessmen began to swivel in their office chairs, eager to avoid the corporate model. These laws were loosened later, as state governments became aware of the larger revenues available from corporate registration. - 15790
The major defining feature of a corporation is that it's legally independent of the people who've created and are part of it. When corporations fail, employees lose their jobs and shareholders lose their investment. However, neither of them are liable for the corporation's debts. This rule, called limited liability, is why corporations tend to have an abbreviation, such as Inc., Ltd., or Plc. after their names. Despite the fact that they're not really people, corporations are recognized as having responsibilities and rights in the same way as people. They can be responsible for human rights violations and can exercise rights against the state and individuals. They can even be convicted of criminal offenses.
The etymology of the word corporation stems from "corpus" which is Latin for "body." This reflects the fact corporations are entities that enjoy legal rights. Churches and local governments in medieval Europe were also incorporated. The goal was for the incorporation to last forever, surviving longer than any particularly member. The Stora Kopparberg mining community in Falun, Sweden may be the oldest commercial corporation in the world, having obtained its charter from King Magnus Eriksson in the 1300s. The Hudson's Bay Company and Dutch East India Company are examples of corporations chartered by European countries to lead colonial endeavors.
During the Colonial expansion of the 17th century, a variant of the modern coporation emerged. This variant was the chartered company. A prime, a powerful, example was the Dutch East India Company. Investors in this company had paper certificates that acted as proof of ownership. They could trade these shares on the original stock exchange in Amsterdam, and were explicitly granted a form of the modern limited liability in the royal charter for the company.
As the chartering of corporation began to fall from favor, governments began to more closely regulate these companies. Investors were required to be given an equal say in the governance of the corporation, and corporations were required to comply with the purposes their charters expressed. Because of this, many of the century's most famous businessmen began to swivel in their office chairs, eager to avoid the corporate model. These laws were loosened later, as state governments became aware of the larger revenues available from corporate registration. - 15790
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