corporation
Corporations are businesses that have been incorporated - they receive the same status as a person in a court of law. The advantage of incorporating, from an investors point of view is that investors in a corporation are granted
limited liability under most legal systems. In turn, most argue that a corporation has a responsibility to the public, in regard to how it conducts its affairs. It is the responsibility of government to identify what those responsibilities are and how they are to be met.
[+] The legal framework for corporations.
Within the official framework, a corporation, or in some jurisdictions a company, forms a legal, artificial entity with or without shareholders. In common law countries, the classic statement of this principle is found in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd (1915), where Lord Haldane said:
My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.
Humans, trusts, other corporations or other legal entities can hold shares. When no stockholders exist, a corporation may exist as a "non-stock corporation", a "membership corporation", or similar — this second type of corporation counts as a not-for-profit corporation. In either category, the corporation comprises a collective of individuals with a distinct legal status and with special privileges not vouchsafed to ordinary unincorporated businesses, to voluntary associations, or to groups of individuals. Corporations receive a charter from a state, and become regulated by the laws enacted by that state. The law of the state in which a corporation operates (if different from the state in which it originates) will generally regulate its activities.
governance multinational corporation,
corporatism,
globalization
Certain jurisdictions do not allow the use of the word "company" alone to denote corporate status, since the word "company" may refer to a partnership or to a sole proprietorship, or even, archaically, to a group of not necessarily related people (for example, those staying in a tavern).
[+] Position: corporations are responsible to the many stakeholders
Looking at the corporation as an enterprise that encompasses the activities of many participants: shareholders, managers, employees, lenders, suppliers, customers and the members of the communities at large in which the corporation conducts its business, one must conclude that corporations are responsible to the many stakeholders who are affected by the actions of the corporation.
A corporation is primarily responsible to enrich shareholder))s. Those that are not, lose investors and fail to achieve maximum internal efficiency, and may fail. Some
evidence for this position:
- Henry Ford considered a corporation a poor instrument to do anything but deliver a return on investment for doing one thing well - other institutions had other functions but a corporation was not designed to evaluate charities or do good works, this was up to the shareholders who became rich from a corporation's efficient actions - subsequently Ford Moter Corporation became a very successful company.
