Corporation

A corporation is a legal entity (distinct from a natural person) that often has similar rights in law to those of a natural person. 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).

Origins

Etymology

The word "corporation" derives from the Latin corpus (body), representing a "body of people"; that is, a group of people authorized to act as an individual (Oxford English Dictionary). The word universitas also used to refer to a group of people but now refers specifically to a group of scholars (see University). In the United Kingdom and Republic of Ireland, the term corporation was also used for the local government body in charge of a borough. This style was replaced in most cases with the term council in the United Kingdom in 1973, and in the Republic of Ireland in 2001. The sole exception is the Corporation of London which retains the title.

Related Topics:
Latin - Oxford English Dictionary - University - United Kingdom - Republic of Ireland - Borough - Council - Corporation of London

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

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.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

With the collapse of the Roman Empire, the rise of 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.

Related Topics:
Roman Empire - Christianity

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

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.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

This, together with discussion as to the relationship between the head of a corporation (such as the Pope) and its members, contributed not only to the development of modern corporations and corporate theory but also set the stage for many ideas that would come to fruition during the enlightenment. Kenneth Pomeranz, an economic historian, argues that the need to perform pseudo-governmental operations (such as the waging of war) accounts for the development of this economic structure in Europe but not in China or in the Middle East.

Related Topics:
Corporate theory - Kenneth Pomeranz - War - Europe - China - Middle East

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

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. The law classifies a corporation either as a corporation sole (one person) or as a corporation aggregate (any other number).

Related Topics:
Corporation sole - Corporation aggregate

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Examples include (the link gives the legal name; the nickname appears in brackets with the nature of the corporation)

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

• The Governor and Company of the Bank of England (Bank of England — corporation aggregate)
• The Chancellor Masters and Scholars of the University of Cambridge (Cambridge University — corporation aggregate)
• The President and Fellows of Harvard College (Harvard College — corporation aggregate)
• Her Majesty the Queen in Right of New Zealand (New Zealand Government — corporation sole)
• The Archbishop of Canterbury (corporation sole)
• The Dean, Chapter and Students of the Cathedral Church of Christ in Oxford of the Foundation of King Henry VIII (Christ Church, Oxford — corporation aggregate)

Using strict definitions, universities and colleges count as corporations since they merely comprise groups of people.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Development of modern commercial corporations

Early corporations of the commercial sort were formed under frameworks set up by governments of states to undertake tasks which appeared too risky or too expensive for individuals or governments to embark upon. The alleged oldest commercial corporation in the world, the Stora Kopparberg mining community in Falun, Sweden, reportedly obtained a charter from King Magnus Eriksson in 1347. Many European nations chartered corporations to lead colonial ventures, such as the Dutch East India Company, and these corporations came to play a large part in the history of corporate colonialism.

Related Topics:
State - Stora Kopparberg - Mining - Falun - Sweden - Charter - King - Magnus Eriksson - 1347 - Dutch East India Company - Corporate colonialism

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In the United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was very restrictive and very 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 the corporation's activities were tightly restricted to its express purposes. Many private firms in the 19th century avoided the corporate model for these reasons (Andrew Carnegie 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 economic value of 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. 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.

Related Topics:
United States - Andrew Carnegie - Limited partnership - John D. Rockefeller - Standard Oil - Trust - New Jersey - Delaware

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The 20th century saw a proliferation of enabling law across the world, which helped to drive economic booms in many countries before and after World War I. After World War II, and especially starting in the 1980s, many countries with large state-owned corporations moved toward privatization, further reducing government interference in corporate activity. Another major postwar shift was toward conglomerates, in which large corporations purchased smaller corporations to expand their industrial base. Japanese firms developed a horizontal conglomeration model, the keiretsu, which was later duplicated in other countries as well. While corporate efficiency (and profitability) skyrocketed, small shareholder control was diminished and directors of corporations assumed greater control over business, contributing in part to the hostile takeover movement of the 1980s and the accounting scandals that brought down Enron and WorldCom following the turn of the century.

Related Topics:
World War I - World War II - Privatization - Conglomerate - Japan - Keiretsu - Director - Hostile takeover - Enron - WorldCom

~ ~ ~ ~ ~ ~ ~ ~ ~ ~