Corporation is an artificial being, invisible, intangible and existing only in contemplation of law. It has neither a mind nor a body of its own.

Corporation is an artificial being, invisible, intangible and existing only in contemplation of law. It has neither a mind nor a body of its own.

Introduction:

The word corporation refers to any group of persons united or regarded as united in one body. Or a group of people authorized by law to act as a legal personality and having its own powers, duties and liabilities. Also we can say a corporation is a lawful entity that is written below the laws of a declare arranged to install the entity as a separate lawful entity having its have privileges and obligations divergent from those of its members. Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous. In these respects, corporations differ from sole proprietorships and limited partnerships.

To organize a corporation that could claim a juridical personality of its own and transact business as such, is not a matter of absolute right but a privilege which may be enjoyed only under such terms as the State may deem necessary to impose.[1]

Before a corporation may acquire juridical personality, the State must give its consent either in the form of a special law or a general enabling act, and the procedure and conditions provided under the law for the acquisition of such juridical personality must be complied with. The failure to comply with the statutory procedure and conditions does not warrant a finding that such association achieved the acquisition of a separate juridical personality, even when it adopts sets of constitution and by-laws. [2]

Since all corporations, big or small, must abide by the provisions of the Corporation Code, then even a simple family corporation cannot claim an exemption nor can it have rules and practices other than those established by law.[3]

Description

A corporation is treated as a “person” with bulk of the rights and responsibilities of a real person. A corporation is not sanctioned to retain public office or vote, but it does compensate profits taxes. It may be positioned as a profit taking in or nonprofit organization and may be publicly or privately held. The stock of a public business is marketed on a stock exchange. There may be thousands, even millions, of stockholders in a public company. Stock of a privately held business is not marketed on an exchange and there are broadly articulating simply a small diagram of stockholders.

Despite not being natural separate population, corporations are understood by the law to have rights and responsibilities like natural separate population (“people”). Corporations can exercise human rights against real people and the declare, and they can themselves be responsible for human rights violations. Corporations are conceptually immortal but they can “die” after they are “dissolved” either by statutory task, lead of court, or voluntary motion on the component of shareholders. Insolvency may issue in a type of corporate ‘death’, after creditors compel the liquidation and dissolution of the corporation below court lead, but it bulk regularly results in a reorganizing of corporate holdings. Corporations can even be convicted of criminal offenses, such as dishonesty and manslaughter.

To organize a corporation that could contend a juridical personality of its have and transact finance as such, is not a material of absolute right but a privilege which may be loved simply below such terms as the State may deem necessary to cause[4] .

Before a corporation may earn juridical personality, the State must give its go-ahead either in the type of a special law or a complete enabling conduct, and the manner and conditions granted below the law for the acquisition of such juridical personality must be heeded with. The failure to heed with the statutory manner and conditions does not be labeled to a locating that such group achieved the acquisition of a separate juridical personality, even after it supports sets of constitution and by-laws.[5]

Since all corporations, high or small, must abide by the provisions of the Corporation Code, afterward even a basic family corporation cannot contend an exemption nor can it have administers and practices as an alternative those positioned by law.[6].

Analysis of the characteristics:

  • Artificial being:  Artificial method something that is written by man not eventuated naturally, lacking naturalness or spontaneity. A corporation is said to be a fake being because it is a man organized thing and is not written naturally. The owners or the personnel are natural being and grouped combined for a regular purpose. As a corporation is a separate lawful entity the population is connected with a corporation not a component of it.
  • Invisible: Invisibility is the declare of an object that cannot be seen. Literally something is in not visible declared is summoned invisible. Though they cannot be supposed the appearances organized by them is supposed or realized in the world. A corporation is not the finance supplies that can be supposed, or the owners it is a separate entity. The supplies, property or people enlisted are visible but not the corporation itself because it is a separate lawful entity.[7]
  • Intangible: The word intangible refers to something that cannot be quantified but can be realized. In economics intangibles are understood but not estimated within a given theory of economics. It has dissimilar engages in dissimilar fields. In arts, intangibles usually refer to the artist’s unique embodiment of substance and form. In finance, intangibles are usually referred to as intangible supplies or intellectual capital. In law, legally written intangibles are referred to as intellectual property. In economic analysis it refers to good will or perceived value.

In that case a corporation is said to be intangible because corporation can be realized cannot be measured. Corporation cannot be measured by how many office buildings it has or how many owners it has. As we know from the definition, corporation is separate legal entity so it is intangible.

  • Contemplation of law: It method a corporation is written through law or it requires numerous lawful considerations. According to Miller “a corporation is a fake creature that exists simply in law. Its existence depends on the declare law.” Again Jentz says “corporation is written by statute of law, either declare law or federal law”
  • Neither has a body or a mind of its own: No invisible, intangible, fake being can have a body or a mind. A corporation being a fake being cannot have a head because it is run by the population and run in a definite position that is written by people. So it does not have a body or head of its own.

Lord Chancellor Haldane says: 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[8]

Every corporation may at any assembly of its board of directors or governing body sell, hire or exchange all or significantly all of its property and supplies, surrounding its goodwill and its corporate franchises, upon such terms and conditions and for such debate, which may consist in every component of or in component of currency or other property, surrounding portions of stock in, and/or other securities of, any other corporation or corporations, as its board of directors or governing body deems expedient and for the best spare-time activities of the corporation, after and as agent by a resolution supported by the holders of a majority of the very special stock of the corporation labeled to vote thereon or, if the corporation is a nonstick corporation, by a majority of the constituents having the right to vote for the election of the constituents of the governing body and any other constituents labeled to vote thereon below the certificate of incorporation or the bylaws of such corporation, at a assembly duly summoned upon at least 20 days’ notice. The identity of the assembly shall declare that such a resolution will be considered.

Justification:

A corporation is formed in law. It is an association of a group of people formed together for some purpose. There are some features of a corporation. They are:

a) Legal personality- made in contemplation of law

b) Permanent existence- artificial being

c) Management- neither has a body nor a mind

d) Not a citizen- invisible, artificial and intangible

e) Fundamental rights- separate entity.

So, here we can see that the claims are justified.

There are some types of corporation. They are:

General Corporation

This is the most common corporate structure. The corporation is a separate legal entity that is owned by stockholders. A general corporation may have an unlimited number of stockholders that, due to the separate legal nature of the corporation, are protected from the creditors of the business. A stockholder’s personal liability is usually limited to the amount of investment in the corporation and no more.

Close Corporation

There are a few minor, but significant, differences between general corporations and close corporations.  In most states where they are recognized, close corporations are limited to 30 to 50 stockholders. In addition, many close corporation statutes require that the directors of a close corporation must first offer the shares to existing stockholders before selling to new shareholders.

This type of corporation is particularly well suited for a group of individuals who will own the corporation with some members actively involved in the management another members only involved on a limited or indirect level.

Limited Liability Company (LLC)

LLCs have long been a traditional form of business structure in Europe and Latin America. LLCs were first introduced in the United States by the state of Wyoming in 1977 and authorized for pass-through taxation (similar to partnerships and S Corporations) by the IRS in 1988. With the recent inclusion of Hawaii, all 50 states and Washington, D.C. have now adopted some form of LLC legislation for both domestic and foreign (out of state) limited liability companies.

Many business professionals believe LLCs present a superior alternative to corporations and partnerships because LLCs combine many of the advantages of both. With an LLC, the owners can have the corporate liability protection for their personal assets from business debt as well as the tax advantages of partnerships or S Corporations. It is similar to an S Corporation without the IRS’ restrictions.

Conclusion

A corporation can be small or big. But the main unique will remain same in everywhere in the world. Depending on the elevation, category or position small proportion item might vary but rudimentary item will be same. A corporation is regularly that’s why invisible, separate from its owners, intangible and organized by engaging law. Despite not being natural separate population, corporations are understood by the law to have rights and responsibilities like natural separate population (“people”). Corporations can exercise human rights against real people and the declare, and they can themselves be responsible for human rights violations. Corporations are conceptually immortal but they can “die” after they are “dissolved” either by statutory task, lead of court, or voluntary motion on the component of shareholders. Insolvency may issue in a type of corporate ‘death’, after creditors compel the liquidation and dissolution of the corporation below court lead, but it bulk regularly results in a reorganizing of corporate holdings. Corporations can even be convicted of criminal offenses, such as dishonesty and manslaughter.

BIBLIOGRAPHY

1.       Dictionary reference.com

2.        The elements of business law by Ernest Wilson,

3.       Huffcuff George & Gleason Bogert

4.       Tax Savvy for Small Business By Frederick W. Daily, Frederick Daily

5.        Wikipedia.com. Dictionary.reference.com

6.       Eugene A. Craig and M. Lichtenstein, “Visibility-Invisibility Cycles as a Function of Stimulus-Orientation,” The American Journal of Psychology,

7.       http://delcode.delaware.gov/title8/c001/sc10/index.shtml

[1]-cf. Ang Pue & Co. v. Sec. of Commerce and Industry, 5 SCRA 645 [1962]

[2] International Express Travel & Tour Services, Inc. v. Court of Appeals, 343 SCRA 674 (2000).

[3]Torres v. Court of Appeals, 278 SCRA 793 (1997)

[4]cf. Ang Pue & Co. v. Sec. of Commerce and Industry, 5 SCRA 645 [1962]

[5] International Express Travel & Tour Services, Inc. v. Court of Appeals, 343 SCRA 674 (2000).

[6] xTorres v. Court of Appeals, 278 SCRA 793 (1997)

[7] Eugene A. Craig and M. Lichtenstein, “Visibility-Invisibility Cycles as a Function of Stimulus-Orientation,” The American Journal of Psychology, 66.4 (Oct., 1953):554-563

[8] . Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd[1915] AC 705)

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