in law, organization enjoying legal personality for the purpose of carrying on certain activities. Most corporations are businesses for profit; they are usually organized by three or more subscribers who raise capital for the corporate activities by selling shares of stock
, which represent ownership and are transferable. Besides business corporations, there are also charitable, cooperative, municipal, and religious corporations, all with distinctive features. In the United States all governmental units smaller than a state (e.g., counties, cities) are municipal corporations. Certain religious functionaries (e.g., Roman Catholic archbishops) legally are corporations sole.
The legal personality of a corporation is symbolized by its seal and its distinctive name. As a legal person, the corporation continues in existence when the organizers lose their connection with it. In most cases its liability is limited to the assets it possesses and creditors may not seize property of persons associated with the corporation as stockholders or otherwise. Legal personality gives the corporation many of the capacities of a natural person; e.g., it can hold property and can even commit crimes (for which it may be fined and its directors imprisoned).
Sections in this article:
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.