Corporation
A corporation is a type of legal entity and organizational structure that is separate and distinct from its owners, who are called shareholders. It is created under the laws of a particular jurisdiction, typically by filing articles of incorporation or a similar document with the appropriate government agency.
Corporations are considered legal persons, which means they have many of the same rights and responsibilities as individual persons. They can own property, enter into contracts, sue and be sued, and be held liable for their actions. The key feature of a corporation is that it provides limited liability for its shareholders, meaning that their financial responsibility for the corporation’s debts and obligations is limited to the amount they have invested in the company’s stock.
Corporations can be private or public. Private corporations are owned by a limited number of shareholders, and their shares are not traded on public stock exchanges. Public corporations, on the other hand, have shares that are traded on stock exchanges and can be bought and sold by the general public.
The management of a corporation is typically overseen by a board of directors, who are elected by the shareholders. The board is responsible for making major decisions and setting the strategic direction of the company. They also appoint the company’s officers, such as the CEO, who manage the day-to-day operations of the corporation.
Corporations are subject to various rules and regulations depending on the jurisdiction in which they are incorporated, as well as any industry-specific regulations that may apply. They are also required to pay taxes on their profits, although the tax treatment of corporations can vary significantly between different countries and jurisdictions.
Example of a Corporation
Let’s take the example of Apple Inc., a well-known public corporation based in the United States.
Apple Inc. is a multinational technology company that designs, manufactures, and markets consumer electronics, software, and services. It was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976 and was incorporated as Apple Computer Inc. in 1977. The company’s primary products include the iPhone, iPad, Mac computers, iPod, Apple Watch, Apple TV, and software such as iOS, macOS, iTunes, and the iWork and iLife suites.
Apple Inc. is a publicly traded company, which means its shares are listed on a stock exchange, specifically the NASDAQ under the ticker symbol “AAPL.” This allows individual and institutional investors to buy and sell shares of Apple Inc., participating in the ownership and potential growth of the company. As a public corporation, Apple Inc. is subject to regulations from the U.S. Securities and Exchange Commission (SEC) and is required to disclose financial information and other relevant details to its shareholders and the public regularly.
The company is governed by a board of directors, who are elected by the shareholders. The board oversees the overall strategic direction of the company and appoints executive officers, such as the CEO, who are responsible for managing the day-to-day operations. In Apple’s case, the current CEO is Tim Cook, who succeeded Steve Jobs in 2011.
Apple Inc., like other corporations, enjoys limited liability for its shareholders, meaning that their financial responsibility for the company’s debts and obligations is limited to the amount they have invested in the company’s stock. This protects shareholders from personal financial risk in the event of the company’s bankruptcy or other financial difficulties.
As a corporation, Apple Inc. is subject to taxes on its profits, as well as various rules and regulations in the countries where it operates.
