A
corporation 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 their employees and
shareholders, and may conduct business as either a
profit-seeking
business or not for profit business. 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 corporations tend to have
limited liability, have
shareholders who own or hold
shares of a type of security commonly called
stock, and are controlled by a
board of directors who are normally elected or appointed by the shareholders.
In
American English the word
corporation is widely used to describe large incorporated businesses. In
British English and in the commonwealth countries, the term
limited company is more widely used to describe the same sort of entity while the word
corporation 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 human beings, corporations, as far as the law is concerned, as
legal persons have many of the same rights and responsibilities as natural people do. 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.