Cj Corporation Business Information, Profile, and History

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otheruses

A corporation is a legal entity which, while being composed of natural persons, exists completely separately from them. The extent and scope of its status and capacity is determined by the law of the place of incorporation.

Investors and entrepreneurs often form joint stock companies and incorporate them to facilitate a business; Corporations may also be formed for local government (municipal corporation), policial, religious, and charitable purposes (not-for-profit corporation), or government programs (government-owned corporation). Under such a doctrine (traditionally seen as a legal fiction), a corporation enjoys many of the rights and obligations of individual persons, such as the ability to own property, sign binding contracts, pay taxes, have certain constitutional rights, and otherwise participate in society. (Note that corporations do not possess all the rights appertaining to individuals: in most jurisdictions, for example, a corporation cannot become a citizen and vote.)

In common law countries, the classic statement of this principle is found in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd 1915
AC 705, where Lord Haldane said:

"My Lords, a corporation is an abstraction. 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."

The most salient features of incorporation include:

Limited Liability

Unlike in a partnership or sole proprietorship, members of a corporation have "limited" liability for the corporation's debts and obligations: see leading case in common law,

Perpetual Lifetime

The assets and structure of the corporation exist beyond the lifetime of any of its members or agents. This allows for stability and accumulation of capital, which thus becomes available for investment in projects of a larger size and over a longer term than if the corporate assets remained subject to dissolution and distribution. This feature also had great importance in the medieval period, when land donated to the Church (a corporation) would not generate the feudal fees that a lord could claim upon a landholder's death. However, in practice, dissolution only occurs for corporations that request it or fail to meet annual filing requirements.)

Ownership and control

Humans and other legal entities composed of humans (such as trusts and other corporations) can be members of corporations. In the case of for-profit corporations, these members hold shares and are thus called shareholders. In either category, the corporation comprises a collective of individuals with a distinct legal status and with special privileges not provided to ordinary unincorporated businesses, to voluntary associations, or to groups of individuals.

Typically, a board of directors governs a corporation on the behalf of the members. The corporate members elect the directors, and the board has a fiduciary duty to look after the interests of the corporation. The corporate officers such as the CEO, president, treasurer, and other titled officers are usually chosen by the board to manage the affairs of the corporation.

Corporations can also be controlled (in part) by creditors such as banks. Creditors are not said to "own" the corporation as shareholders do, but can outweigh the shareholders in practice, especially if the corporation is experiencing financial difficulties and cannot survive without credit.

Members of a corporation are said to have a "residual interest." As part of this registration, it must in many cases be required to designate the principal address of the corporation as well as a Registered Agent (a person or company that is designated to receive legal service of process). As part of the registration, it may also be required to designate an agent or other legal representative of the corporation depending on the filing jurisdiction.

Generally, a corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors. Once the articles are approved, the corporation's directors meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions.

The law of the jurisdiction in which a corporation operates will regulate most of its internal activities, as well as its finances. If a corporation operates outside its home state, it is often required to register with other governments as a foreign corporation, and is almost always subject to laws of its host state pertaining to employment, crimes, contracts, civil actions, and the like. In Canada, this possibility is taken to its logical extreme: many smaller Canadian corporations have no names at all, merely numbers (e.g., "1234567 Ontario Limited").

In most countries, corporate names include the term "Corporation", or an abbreviation that denotes the corporate status of the entity. Their use puts all persons on constructive notice that they have to deal with an entity whose liability remains limited, in the sense that it does not reach back to the persons who constitute the entity; one can only collect from whatever assets the entity still controls at the time one obtains a judgment against it.

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). See corporate manslaughter specifically, and corporate liability generally.

The present law differs among jurisdictions, and is in a state of flux. www.corpwatch.org/article.php?id=1810

Origins

Etymology

The word "corporation" derives from the Latin Corpus (body), representing a "body of people"; In the United Kingdom and Republic of Ireland, the term corporation was also used for the local government body in charge of a borough. 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. 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.

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

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, 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.

In the United States, government chartering began to fall out of vogue in the mid-1800s. 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. New Jersey was the first state to adopt an "enabling" corporate law, with the goal of attracting more business to the state. even today, most major public corporations are set up under Delaware law.

The 20th century saw a proliferation of enabling law across the world, which some argue helped to drive economic booms in many countries before and after World War I (the advantage to the overall economy of enabling laws must, however, be viewed in light of the success of Carnegie Steel and Standard Oil, the economic stimulus of the war, the flourishing of the automotive sector, and other major economic drivers). Starting in the 1980s, many countries with large state-owned corporations moved toward privatization, the selling of publicly-owned services and enterprises to private, normally corporate, ownership. Deregulation - reducing the public-interest regulation of corporate activity - often accompanied privatization as part of an ideologically laissez-faire policy. Another major postwar shift was toward development of 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.

More recent corporate developments include downsizing, contracting-out or out-sourcing, off-shoring and scoping down activities to core business, as information technology, global trade regimes, and cheap fossil fuels enable corporations to reduce and externalize labour costs, transportation costs and transaction costs, and thereby maximize profits.

For a history of corporations that is ?pro-corporate?, see John Micklethwait and Adrian Wooldridge, The Company: a Short History of a Revolutionary Idea (New York: Modern Library, 2003).

Types of corporations

For-profit and non-profit

Main article: non-profit organization

In modern economic systems, the corporate conventions of governance commonly appear in a wide variety of business and non-profit activities.

Multinational corporations

Main article: Multinational corporation.

Following on the success of the corporate model at a national level, many corporations have become transnational or multinational corporations: growing beyond national boundaries to attain sometimes remarkable positions of power and influence in the process of globalising.

The typical "transnational" or "multinational" may fit into a web of overlapping ownerships and directorships, with multiple branches and lines in different regions, many such sub-groupings comprising corporations in their own right. growth by acquisition or merger can result in a plethora of groupings scattered around and/or spanning the globe, with structures and names which do not always make clear the structures of ownership and interaction.

In the spread of corporations across multiple continents, the importance of corporate culture has grown as a unifying factor and a counterweight to local national sensibilities and cultural awareness.

National features

There are various types of corporations throughout the world.

United States

In the United States, several corporate forms exist; The federal government usually does not grant corporate charters, except for some special instances such as Amtrak and Freddie Mac and banks and credit unions which opt not to receive charters from their home states.

Because corporate law differs from state to state, many American corporations are incorporated in a different state than their primary base of operations. Many large corporations are chartered as "Delaware corporations" under the laws of Delaware, which charges no tax on activities outside the state and has courts experienced in corporate law. Corporations set up for privacy or asset protection often charter in Nevada, which does not require disclosure of share ownership. Many other states, particularly smaller states, have harmonized their corporate law around the Model Business Corporation Act, a "guideline" statute drafted by the American Bar Association.

Legally, corporations are accorded some corporate personhood, i.e. Constitutional rights similar to those held by persons. Contrary to accepted legal precedent the U.S. Supreme Court did not rule on this question in the 1886 case Santa Clara County v. Because of illness, Chief Justice Morrison Remick Waite never reviewed the head notes.

Thus, without any deliberation, decision or ruling by the United States Supreme Court, the United States law has proceeded since 1886 with an accepted legal precedent based on the mistake of a clerk who reported something that never occurred.

The oldest corporation in the United States, and the oldest in North America, is the President and Fellows of Harvard College (also known as the Harvard Corporation), chartered in 1650.

Historically, most U.S. states issued charters for fixed lengths of time (for example, a manufacturing corporation might receive a charter good for 40 years), and only by an act of the legislature. Some individuals believed corporations should remain accountable to the government and used these limited charters as a means of forcing companies to do so. Most states now charter unlimited-term corporations for a small fee, and possibly for a yearly tax.

Many countries around the world now have corporate laws based upon state laws from the United States. For example, corporations in Saudi Arabia follow corporate laws copied from New York.

Canada

In Canada both the federal government and the provinces have corporate statutes, and thus a corporation may have a provincial or a federal charter. Many older corporations in Canada stem from Acts of Parliament passed before the introduction of general corporation law. The oldest corporation in Canada is the Hudson's Bay Company, chartered in 1670. Federally recognized corporations are regulated by the Canada Business Corporations Act.

Australia

In Australia corporations are registered and regulated by the Commonwealth Government through the Australian Securities and Investments Commission. Corporations law has been largely codified in the Corporations Act 2001.

German-speaking countries

Germany, Austria, Switzerland and Liechtenstein recognize two forms of corporation: the Aktiengesellschaft (AG), analogous to public corporations in the English-speaking world, and the Gesellschaft mit beschränkter Haftung (GmbH), similar to (and an inspiration for) the modern limited liability company.

Italy

Italy recognize two form of company with limited liability : "S.r.l", or "Società a Responsabilità Limitata" (similar to Limited liability company) and "S.p.A" or "Società Per Azioni" (similar to american stock corporation).

Corporate taxation

In many countries, including the United States and United Kingdom, corporate profits are taxed at a corporate tax rate, and dividends paid to shareholders are taxed at a separate rate.

Criticisms

Adam Smith in the Wealth of Nations criticized the corporate form because of the separation of ownership and management.

The directors of such joint-stock companies, however, being the managers rather of other people?s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.... Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.

Noam Chomsky, the MIT linguist and activist describes the corporate structure as being fascist:

A corporation or an industry is, if we were to think of it in political terms, fascist; These include:

• Partnership
  
• Limited partnership (LP)
  
• Limited liability partnership (LLP)
  
• Limited liability company (LLC)
  
• Limited company (Ltd.)
  
• Not-for-profit corporation
  
• Sole proprietorship
  
• Trust company, Trust law
  

References

• Sobel, Robert The Age of Giant Corporations: a Microeconomic History of American Business, 1914-1984 (1984)
  
• Klein and Coffee.