What we should know about corporations
Talking about money implies talking about business, where the money usually comes from. To talk about it demands to know how enterprises are organized. There are three types of business organizations: sole proprietorship, partnership and corporation; the most common form of business in the United States is the corporation. A majority of theGross Domestic Product comes from corporations. This business entity must be identified by using “Corp.” or “Inc.”. So, we can associate these abbreviations with the concept of corporation, but exactly, what corporation means? The following paper is going to show the principal facts that we must know about corporations meaning, its characteristics, its classification, and creation procedures.This essay will explain the principal types of business and inform anyone interested in how to create his or her own business in United States.
According to Emerson (331), it was usual that the imperial government of Rome suppressed private societies and associations of every kind, but allowed individuals to form collegia, which was a nonprofit membership clubs for such diverse purposes aseducation, control, fire, and burial of members. The Roma model was expanded in France and Germany around XVI century to allow merchants to form trading societies and crafts guilds for investment and larger entrepreneurial purposes. Around the 1500’s, the English government began to grant monopolies to groups of individuals in trading “for profit” with the Crown receiving a share of earnings. The Englishcolonized the New World through these monopolies, so, when granted a charter for the colonization and development of territories, they operated as governments under the supervision of the king.
During colonization, the corporate charters were granted to private individuals by acts of the colonial legislatures. In the beginning, corporations were created by grant of charter by the many states,initially by legislative enactment, and later by special agencies created for this purpose. Later in the 1700’s, the states began enacting general corporation statutes or codes that permitted corporations to be formed without a separate approval of the legislature. Since 1776, the corporations were the most important business in United States; these laws were applied in many of American’s coloniesaccording to the English Law in the XVI century. After the Revolutionary War, the states developed their own corporation laws (Cheeseman, 399).
Nowadays, the Revised Model of Business Corporation Act (RMBCA) drafted in 1984, provided a uniform laws for creation, operation and termination of corporation. Many states have adopted all or part of the RMBCA as their corporation code (Cheeseman, 401).1. DEFINITION OF CORPORATION
The three types of business organizations are: the sole proprietary, the partnership, and the corporation. A sole proprietary is the simplest form of business organization which just has one owner. His/her businesses are not distinct legal entities. The owner has unlimited liability for debts of the business. On the other hand, the partnership is the otherbusiness organization which has at least two owners. The owner or owners have the express or implicitly agreement to establish and run a business for profit.
Finally, the most important business organization is the corporation, which is the main focus of this work. According to Cheeseman (399), it is an artificial person created by the state which can engage in contracts, enforce them, hold a titleto and transfer a property, and sue or be sued in its own name. The corporation also, as an artificial person is found civilly and criminally liable by violations of law, for instance, a corporation can be criminal punished by the assessment of a fine or loss license.
2. CHARACTERISTICS OF CORPORATIONS
Generally, for a business organization to be treated as a corporation, it must meet the...
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