A fictitious legal entity/person which has rights and duties independent of the rights and duties of real persons and which is legally authorized to act in its own name through duly appointed agents. It is owned by shareholders. Usually created under the authority of state law.
An aggregate corporation is an ideal body, created by law, composed of individuals united under a common name, the members of which succeed each other, so that the body continues the same notwithstanding the changes of the individuals who compose it, and which for certain purposes is considered as a natural person.
A corporation, or body politic, or body incorporate, is a collection of many; individuals united in one body, under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with a capacity of acting in several respects as an individual, particularly of taking and granting property, contracting obligations and of suing and being sued; of enjoying privileges and immunities in common and of exercising a variety of political rights, more or less extensive, according to the design of its institution or the powers conferred upon it, either at the time of its creation or at any subsequent period of its existence.
In the case of Dartmouth College against Woodward, 4 Wheat. Rep. 626, Chief Justice Marshall describes a corporation to be 'an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law,' continues the judge, 'it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and if the expression may be allowed, individuality properties by which a perpetual succession of many persons are considered, as the same, and may act as the single individual, They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyance for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use.'
The words corporation and incorporation are frequently confounded, particularly in the old books. The distinction between them is, however, obvious; the one is the institution itself, the other the act by which the institution is created.
Corporations are divided into public and private.
Public corporations, which are also called political and sometimes municipal corporations, are those which have for their object the government of a portion of the state and although in such case it involves some private interests, yet, as it is endowed with a portion of political power, the term public has been deemed appropriate.
Another class of public corporations are those which are founded for public, not for political or municipal purposes, and the whole interest in which belongs to the government. The Bank of Philadelphia for example, if the whole stock belonged exclusively to the government, would be a public corporation; but inasmuch as there are other owners of the stock, it is a private corporation.
Nations or state are denominated by publicists, bodies politic, and are said to have their affairs and interests and to deliberate and resolve in common. They thus become as moral persons, having an understanding and will peculiar to themselves, and are susceptible of obligations and laws. In this extensive sense the United States may be termed a corporation; and so may each state singly.
Private Corporations. In the popular meaning of the term nearly every corporation is public, inasmuch as they are created for the public benefit; but if the whole interest does not belong to the government, or if the corporation is not created for the administration of political or municipal power, the corporation is private. A bank, for instance, may be created by the government for its own uses; but if the stock is owned by private persons it is a private corporation, although it is created by the government and its operations partake of a private nature. The rule is the same in the case of canal, bridge, turnpike, insurance companies, and the like. Charitable or literary corporations, founded by private benefaction, are in point of law private corporations, though dedicated to public charity, or for the general promotion of learning.
Private corporations are divided into ecclesiastical and lay.
Ecclesiastical corporations in the United States are commonly called religious corporations they are created to enable religious societies to manage with more facility and advantage the temporalities belonging to the church or congregation.
Lay corporations are divided into civil and eleemosynary. Civil corporations are created for an infinite variety of temporal purposes, such as affording facilities for obtaining loans of money; the making of canals, turnpike roads and the like. And also such as are established for the advancement of learning.
Eleemosynary corporations are such as are instituted upon a principle of charity, their object being the perpetual distribution of the bounty of the founder of them to such persons as he has directed. Of this kind are hospitals for the relief of the impotent, indigent and sick or deaf and dumb.
Corporations, considered in another point of view, are either sole or agregate.
A sole corporation, as its name implies, consists of only one person to whom and his successors belongs that legal perpetuity, the enjoyment of which is denied to all natural persons. Those corporations are not common in the United States. In those states, however, where the religious establishment of the church of England was adopted when they were colonies, together with the common law on that subject, the minister of the parish was seised of the freehold, as persona ecclesiae, in the same manner as in England; and the right of his successors to the freehold being thus established was not destroyed by the abolition of the regal government, nor can it be divested even by an act of the state legislature.
A sole corporation cannot take personal property in succession; its corporate capacity of taking property is confined altogether to real estate.
An aggregate corporation consists of several persons who are united in one society, which is continued by a succession of members. Of this kind are the mayor or commonalty of a city; the heads and fellows of a college; the members of trading companies, and the like.