Concept of the Corporation

Corporations, large and small are the very heart of America’s and the world’s economy. More wealth is created in America and throughout the world every day by corporations than by any other type of business. Half of the population of America and some countries all over the world are employed by corporations. Both public and private corporations are the leading providers of food, clothing, housing, transportation, entertainment, financial services, healthcare, communications, and national security items (Truitt, 2006).
According to the United States Department of State, in the United States alone, most large businesses are organized as corporations. A corporation is a specific legal form of business organization, chartered by one of the 50 states and treated under the law as a person. A corporation has separate and distinct personality aside from its incorporators. They have legal rights under the law. They can sue and be sued in court, create and enter into valid contracts. The legal personality of the corporation shelters the owners from responsibility for its actions. However, the corporate veil is pierced if the corporation is used to perpetrate fraud or participate in the commission of a crime. However, the owners of a corporation also have limited financial liability and shall not be held responsible for corporate debts, which protects their personal properties from lawsuits against the corporation. A corporation has stockholder who owns shares of the corporation. Thus, for instance, a shareholder subscribed and paid $100 for 10 shares of stock in a corporation and the corporation goes declares bankruptcy, the stockholder loses the $100 investment, but the stockholder’s properties are cannot be the subject of any seizure,lien or attachment, pending a court litigation against the corporation.