CORPORATIONS - The Law Mind Legal Dictionary

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CORPORATIONSAuthored

The Law Mind • 1202 words

Definition

A corporation is a legal entity created under statute, recognized as distinct from its owners (shareholders), capable of holding property, entering contracts, suing and being sued, and perpetuating itself independently of changes in membership. The corporation is the foundational business structure in American and English commercial law — and arguably the most consequential legal fiction in modern economic life.

Several distinct meanings appear in legal usage:

1. BUSINESS CORPORATION: The standard for-profit entity chartered under state law. Shareholders hold ownership interests (stock); directors govern; officers manage day-to-day operations. The defining features are limited liability for shareholders, free transferability of shares, centralized management, and (usually) perpetual existence.

2. NONPROFIT CORPORATION: An entity organized for charitable, educational, religious, or other non-commercial purposes. Chartered under separate state nonprofit corporation statutes. No shareholders; governed by directors or trustees. Subject to distinct tax treatment under federal law.

3. PUBLIC (MUNICIPAL) CORPORATION: A governmental or quasi-governmental entity — cities, counties, special districts — chartered by the state to perform public functions. Operates under public law principles distinct from private corporate law.

4. CORPORATION AGGREGATE vs. CORPORATION SOLE: A corporation aggregate is the familiar multi-member entity. A corporation sole is a legal office held by a single person and their successors — historically used for ecclesiastical offices, occasionally for certain public offices.

Common Language

Modern common usage (Wiktionary): Simply the plural of "corporation" — a company or group of companies authorized to act as a single entity and recognized as such by law.

Historical common usage (Webster's 1913): A body formed and authorized by law to act as a single person; a body corporate.

The gap here is practical, not definitional. In ordinary speech, "corporations" calls to mind large public companies — Fortune 500 enterprises with traded stock. In law, the term covers an enormous range of entities: a two-person closely held business, a municipal government, a church, and a hospital system may all be corporations in the legal sense. Researchers who assume "corporation" means "large public company" when reading historical sources or statutes will misread the scope of the law they are analyzing.

Recognized Forms

/SUBTYPES

Close Corporation: A corporation with a small number of shareholders, often subject to transfer restrictions. Many states provide specialized close corporation statutes permitting simplified governance.

Professional Corporation (PC): Formed by licensed professionals (attorneys, physicians, accountants). Shareholders must hold the relevant license. Liability protection for professional malpractice varies by state.

Benefit Corporation (PBC/B-Corp): A statutory form, enacted in many states since 2010, that permits directors to consider non-shareholder stakeholders and social or environmental purposes alongside profit. Distinct from B-Corp certification, which is a private credentialing standard.

S Corporation: Not a separate charter type but a federal tax election available to qualifying small corporations. Pass-through taxation applies; strict eligibility rules govern shareholder count, citizenship, and share classes.

C Corporation: Default federal tax treatment for corporations that have not made an S election. Subject to entity-level corporate income tax.

Why It Matters in Research

The central research trap is treating "corporations" as a uniform category across time and jurisdiction. It is not.

Historical sources — including Bouvier's — were written before the modern statutory consolidation of corporate law. Early corporate law was heavily charter-based: corporations were creatures of specific legislative grants, not general enabling statutes. When Bouvier discusses corporate bonds, corporate powers, or corporate liability, the background assumption is often a specially chartered entity, not the general-purpose business corporation formed by filing articles of incorporation. The ultra vires doctrine (the rule that corporations could not act beyond their charter powers) was a live constraint in the nineteenth century; it is substantially abolished or weakened in modern statutes. Researchers applying historical doctrine to modern entities — or vice versa — must account for this structural shift.

The Bouvier fragment in this entry concerns corporate bonds and the negotiability doctrine — specifically, that bonds issued under valid corporate authority pass as negotiable instruments to holders for value without notice, and that a corporation's long course of paying interest may estop it from later denying the bond's validity. This remains a substantively important point for researchers examining corporate debt instruments in historical sources, but the legal framework around negotiability and estoppel has been substantially recodified.

Jurisdictional variation is significant for research purposes. Delaware dominates public company incorporation nationally, and Delaware General Corporation Law (DGCL) shapes judicial doctrine across jurisdictions through its influence on the Model Business Corporation Act (MBCA). But a closely held company, a benefit corporation, or a professional corporation chartered in another state operates under that state's statute. Never assume Delaware rules apply without verifying the incorporating jurisdiction.

Tax status (C corp vs. S corp) is invisible in state corporate records and in most corporate law sources. Researchers examining corporate governance disputes, fiduciary duties, or liability questions should be aware that tax election affects structure (S corps cannot have more than 100 shareholders or multiple share classes) but does not change the underlying corporate law framework governing the entity.

Historical Dictionary Support

Bouvier's Law Dictionary treats corporations as a well-established doctrinal category but focuses heavily on the attributes of specific corporate instruments — particularly bonds — rather than offering a consolidated theory of the corporate form. The fragment available here addresses the negotiability of corporate bonds, the conditions under which a corporation is estopped from denying bond validity after a course of interest payments, and the protection of bona fide purchasers for value without notice.

This reflects the nineteenth-century preoccupation with the reliability of corporate paper in capital markets — a practical concern driven by railroad and infrastructure financing. What Bouvier does not address, or addresses only obliquely, is the later theoretical development around corporate personality, the fiduciary duties of directors, and the shareholder primacy debate that dominates modern corporate law scholarship. Researchers using Bouvier to reconstruct early corporate doctrine will find it more useful on specific instruments and powers than on the structural theory of the corporation.

Jurisdictional Note

Corporate formation and governance are matters of state law. Delaware's Court of Chancery produces the dominant body of corporate case law for public companies. The Model Business Corporation Act (MBCA), adopted in whole or in part by many states, provides a contrasting framework. Benefit corporation statutes vary materially by state. Federal law governs securities regulation, tax treatment, and certain aspects of publicly traded companies but does not displace state corporate law for governance purposes.

Encyclopedia Cross-Reference

The Law Mind Business Organizations & Corporate Law Encyclopedia:
— Corporate Formation: Corporate Types (Close, Professional, Benefit Corporations)
— Corporate Formation: Corporate Purpose, Powers, and Ultra Vires Doctrine
— Corporate Formation: S Corporations (Tax Election and Requirements)

CORPORATIONSmain

Bouvier's Law Dictionary • 1928

Notwithstanding they are under seal, they are clothed with all the attributes of negotiable or commercial paper, pass by delivery or indorsement, and are not subject to prior equities (where the power to issue them exists) in the hands of holders for value, who took before maturity and without no- tice. Payment of interest on such bonds for a number of years will estop the cor- poration from setting up a mere irregularity in their issue, as against bona fide holders for value; 80 Fed. Rep. 672. The coupons usually attached to such bonds are like- wise negotiable, and may be detached and held separately from the bond, and may be sued on by the holder in his own name without his being the owner of the bonds to which they were originally attached ; 1 Dill. Mun. Corp. § 486; 3 Wall. 327; 1 Dill. 338; whether he has given consideration for them or not; 80 Fed. Rep. 672. Coupons when severed from the bonds cease to be incidents of the bonds, and be- come independent claims, and do not lose their validity, if for any cause the bonds are cancelled or paid before maturity; 20 Wall. 583. See as to coupons as distinct and separate instruments, 6 L. R. A 562, n.: COUPONS. The fact that such bonds are payable out of a special fund, known as a "sinking fund," does not prevent the holder from suing at law to enforce collection; 75 Fed. Rep. 967. A very important principle with respect to municipal bonds was settled by the lead- ing case of Gelpcke v. Dubuque, 1 Wall. 175, in which it was held that bonds which were valid under the decisions of the state court of Iowa at the time they were issued, will be sustained by the federal court, al- though the state court had subsequently overruled its earlier decisions and held that they were issued without authority. See 3 id. 294; 7 id. 181. See also an article sus- taining this doctrine in 4 Harv. L. Rev. 311, by Prof. J. B. Thayer, in a preliminary note to which are cited a number of adverse criticisms of it. Purchasers of the bonds of a municipality issued to aid the building of a railway, which recite a compliance with the law authorizing their issue, are not required to ascertain conditions imposed by the pro- position voted on, which do not appear in the bonds; 82 Fed. Rep. 873; they have a right to assume that the conditions have been complied with; 73 id. 966. See 5 Am. & Eng. R. R. Cas. 241; 36 Cent. L. J. 133; and as to power to subscribe; 18 Am. & Eng. R. R. Cas. 689; 15 id. 621, 655; ratification; 12 Am. & Eng. R. R. Cas. 651; effect of recitals; 12 id. 524; 15 id. 584, 675; 2 Am. & Eng. Corp. Cas. 291, 320; 35 Corp. L. T. 438, 460. See also an extended dís- cussion of cases on municipal bonds in aid of railroads, in the supreme court of the United States; 17 Am. L. Reg. N. S. 209, 609. See, generally, as to municipal bonds for public purposes, Coler; Burhans, Mun.. Bonds; Burroughs, Pub. Sec. in America; Dillon, Mun. Corp.; Jones, Railroad Se- curities, ch. 7; Report Mo. Bar Ass'n, 1891, 221; 1 L. R. A. 787, note; 15 Am. & Eng. Corp. Cas. 356; 86 Fed. Rep. 594, 263; as to election for issue; 40 id. 543; negotiability; 5 id. 593; over issue; 40 id. 535; limit of indebtedness; id. 584; 26 id. 473; fraudulent circulation; 2 id. 263; estoppel to deny validity; 2 Am. Ry. Corp. Cas. 525; power to issue; 5 L. R. A. 726; bona fide holder; 23 Am. L. Reg. N. s. 310; 29 id. N. S. 390; mandamus, to enforce sub- scription; 12 Am. & Eng. Ry. Cas. 609; to enforce payment; 15 id. 629.

corporationsnoun

Wiktionary (English) • 2026

Wiktionary contributors • CC BY-SA 4.0 • via Kaikki
Extracted and formatted for display by Law Mind. Source link opens the current Wiktionary page and its contributor history; it is not a frozen copy of this extract.

plural of corporation

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