Английский язык для юристов. Предпринимательское право
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A corporation is a legal entity (or a legal person) created by a federal statute authorizing individuals to operate an enterprise. The corporation offers a convenient and efficient way to finance a large-scale business operation by dividing its ownership into many units; these units can be sold easily to a large number of investors. The corporate form also offers limited liability to those who share its ownership. In this way, the personal assets of the corporation's owners cannot be taken if the corporation defaults on its obligations or commits a tort or a crime. Unlike the legal status of the partnership, the legal status of the corporation is not affected by the death, incapacity, or bankruptcy of an officer or shareholder.
A private corporation is a corporation formed by private persons to accomplish a task best undertaken by an entity that can raise large amounts of capital quickly or that can grant the protection of limited liability. If the corporation is organized for profit-making purposes, those profits may be distributed to the shareholders in the form of dividends. Dividends are the net profits, or surplus, set aside for the shareholders. Shareholders (or stockholders) are the persons who own units of interest (shares of stock) in a corporation.
The term public corporation is properly used to describe a corporation created by a government for governmental purposes. The term includes incorporated cities, sanitation districts, school districts, transit districts, and so on.
Corporations that are privately organized for profit but also provide a service upon which the public is dependent are generally referred to as quasi-public corporations. In most instances, they are public utilities, which provide the public with such essentials as water, gas, and electricity.
A business corporation may be designated as a close corporation when the outstanding shares of stock and managerial control are closely held by fewer than 50 shareholders.
The people who want to begin a new corporation or who want to incorporate an existing business are called promoters. These people do the actual day-to-day work involved in the incorporation process. Promoters occupy a fiduciary relationship with the nonexistent corporation and its future shareholders, which means that the promoter must act in the best interests of the new corporation and its shareholders. Incorporators are the people who prepare, actually sign the articles of incorporation, and submit them to the appropriate government office.
The articles of incorporation are the written application to the government body for permission to incorporate. The articles, together with the status of incorporation, represent the legal boundaries within which a corporation must conduct its business.
The articles of incorporation must include the corporation name; the duration of the corporation; the purpose(s) of the corporation; the number and classes of shares; the shareholders' rights in relation to shares, classes of shares, and special shares; the shareholders' right to buy new shares; the addresses of its original registered (statutory) office and its original registered (statutory) agent; the number of directors plus the names and addresses of the initial directors; and each incorporator's name and address.
Once satisfied that all legal formalities have been met, the appropriate government officer will issue the corporation's charter, or certificate of incorporation. The charter, or certificate of incorporation, is the corporation's official authorization to do business in the state. After the charter is issued, the corporation then becomes a fully and legally incorporated entity. The work of the promoters and incorporators ends, unless they become directors or officers of the corporation.
The first order of business upon incorporation is the holding of an organizational meeting. The meeting must be run by the initial directors designated in the articles, or by the incorporators. The first order of business at an incorporator-run meeting is to elect the directors.
In addition to the appointment of the first directors, the adoption of bylaws, or regulations, also occurs at the organizational meeting. Bylaws, or regulations, are the rules that guide the corporation's day-to-day internal affairs. Bylaw provisions usually stipulate the time and place of shareholders' and directors' meetings, quorum requirements, qualifications and duties of directors and officers, and procedures for filling board vacancies.
For various liability reasons, the courts may be called upon to decide whether a business entity is a de jure corporation, a de facto corporation, or a corporation by estoppel.
A corporation whose existence is the result of the incorporators having fully or substantially complied with the relevant corporation statutes is a de jure corporation. Its status as a corporation cannot be challenged by private citizens or the state.
Sometimes an error is made in the incorporation process, and the corporation does not exist legally. Nevertheless, as long as the following conditions have been met, a de facto corporation (a corporation in fact) will exist: a valid state incorporation statute must be in effect, the parties must have made a bona fide (good faith) attempt to follow the statute's requirements for incorporation, and the business must have acted as if it were a corporation. Only the state can directly challenge the existence of a de facto corporation. Thus, a de facto corporation has the same rights, privileges, and duties as a de jure corporation as far as anyone other than the state is concerned.
In some jurisdictions, if a group of people act as if they are a corporation when in fact and in law they are not, any parties who have accepted that counterfeit corporation's existence will not be allowed to deny that acceptance. Similarly, individuals who acted as if they were a corporation will not be able to deny that the corporation exists. This doctrine has been labeled corporation by estoppel, which is a legal fiction used by the courts on a case-by-case basis to prevent injustice.