Talk:Corporation

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[edit] Uncategorized discussion

  This is an extremely important subject worthy of much developement. There are issues of profit maximization with Law, having nothing to do with social conventions/practice and as such leading to a de-moralization of society. We can't have laws for every immorality or we would go ( are going!!!) law mad. 
  Whereas corporations seem relatively modern, they have historic antecedants: the Norman invasion of England was done by soliciting warriors for shares, early Brit towns were granted charters ( as in chartered corporations, somehow related to Carthusians ), and my fav, letters of marquis whereby piracy was allowed if the crown got half. In todays world the state will stand by corps for revenue, as in old times. States often function through preferments which cost money, corps provided the loot. No-one should forget the British East India Company ( which figured highly in the USA revolution ). I'd say thois article is as yet merely a stub. We should study this subject well since it's impact is enormousWblakesx 02:43, 29 September 2006 (UTC)wblakesx


it would really help to insert some history.

like 'corporations were invented in the 1700s in such and such countries to do such and such task. it was new because of blah blah blah' some of the big oens were Dutch East India Company etc etc etc

See Talk:Company for some previous discussion.

NPOV alert. The first part of this article, when it starts to define corporations, HEAVILY emphasizes the artificial personhood aspect, which isn't the essence of it at all I don't believe (I believe divided ownership is the essence of a corporation). These paragraphs seem to be written by the same person, or the same spirit, as the article on corporate personhood. If someone could please clean up this article and make it easier for first timers who are very unclear about corporations, which I believe is one of the most misunderstood concepts in modern times, that would be great.

I disagree with the NPOV alert. Divided owership is not the defining characteristic of a corporation. A partnership also has a divided ownership.

The corporation is a legal entity with privaleges granted it via incorporation, including the privalege of artificial personhood. This lets the first time reader in on how such privaleges are gained by an abstraction, a group (of people). There is a common misunderstanding of the corporation with that of business. Perhaps that is where your divided ownership concept comes from. A corporation can be a business. Or a corporation can be something else. Whatever is laid out in its legal charter. I believe it is this that is the great misunderstanding. It is that legality and the privaleges granted to it by the state (state gov't, i.e. we the people} that make a corporation what it is. It is a legal entity first and foremost.

-Dr I (03/09Sept/05)


Why are most American countries chartered in Delaware?

For tax reasons 80.247.95.57 19:10, 6 November 2006 (UTC)

by countries you mean corporations? i dunno, but i'd bet my net worth (-$20,000) that it's for tax reasons

Most American corporations are chartered in Delaware because, in the past, the statutes that concern corporations were far friendlier to existing management and less favourable to shareholders in Delaware than they were elsewhere. The Delaware courts, moreover, had experience in interpreting these laws. Having all of these corporations chartered in Delaware became something of a cash cow to the state government, which all establishment types there were eager to protect.

Now, the laws of most other states have been made at least as lenient as Delaware's were, but many old line companies keep their charters there because it's always been so.

However, monasteries, interest-groups, cities and townships etc. also have corporate identities, some with lengthy histories.

Can someone explain what a "corporate identity" is? Since this term also showed up at London Underground, I assume it is a British English thing that I don't quite grasp on account of having grown up in America. --Ryguasu 19:04 Feb 9, 2003 (UTC)

I put some brief explainations of the variety of business entities here, most people do confuse them with corporation so while they probably deserve their own pages it seems to go here, at least it was started here prior to my arrival. Alex756 05:30 May 4, 2003 (UTC)

Re: why most U.S. corporations are chartered in Delaware. Although Delaware's "leniancy" is a contributing factor, attorneys (including myself) prefer to incorporate in Delaware simply because the law there is so well understood.

Primarily this is because there is so much case-law in Delaware. Lawyers seeking answers to legal questions can find a tremendous amount of guidance in Delaware case-law (and statutory law). Why does Delaware have so much case-law? Two reasons: first, it has a lot of case-law because that's where most corporations are chartered. Think of this like positive feedback. Second, Delaware goes to great lengths to support its preeminence with well-functioning institutions. Delaware has a special court for businesses, the Delaware court of chancery, which is fast and staffed by judges who have expertise in business matters. The Delaware legislature makes frequent amendments to its incorporation laws to add features or resolve ambiguities. The Delaware bar is also very informed and responsive.

Finally, I should mention that the above analysis is generally consistent with the "race to the top" thesis, which posits that, just like products, states compete to provide the best corporate law to companies, and that the competition and selection will tend to make corporate law better. (An accessable exposition of this view is in The Economic Structure of Corporate Law by Frank Easterbrook and Daniel R. Fischel). Some scholars have posited an alternative "race to the bottom" thesis, which posits that, since the managers of a company make the ultimate decision, corporate law instead competes to provide the most pro-management terms (which are by implication, anti-investor, anti-worker, anti-local community, etc.). Although there are undoubtedly instances where this dynamic is important, I don't believe, on purely empirical grounds, that it is generally applicable.

In my own legal practice, I frequently represent companies, investors or workers in start-up companies, and I would never ask for the company to be incorporated in any state other than Delaware, even when the investor or worker would clearly have sufficient leverage to make the selection (an occurrence which happens more frequently than one might suppose).

The Andrew Jackson quote sounds apocryphal and bears a strong resemblance to Lord Thurlow's '"You never expected justice from a corporation did you? They have neither a soul to lose nor a body to kick."' That's found in Bartlett's Familiar Quotations, while I can't find the Jackson quote anywhere credible. So I'll change it.

I just noticed that GmbH (Gesellschaft mit Beschränkter Haftung, a type of German corporation) redirects here. Someone may wish to either expand that page or add some info onto this one. —Mulad 15:52, May 12, 2004 (UTC)

[edit] Limited or Ltd?

Today I edited the rather short (so far) list of New Zealand companies, adding a note that "Ltd" was used for convenience. I now see that one of the links from it goes to a page which has the name of a company ending in "Limited" (which didn't show up on an earlier search).

Does Wikipedia have a standard on that? - Robin Patterson 05:56, 27 May 2004 (UTC)

[edit] Voting of Corporations?

User:Pedant17 added the following to the section Legal status:

(Note that corporations do not possess all the rights appertaining to individuals: in some jurisdictions, for example, a corporation cannot vote.)

Out of curiosity I'd be interested in which jurisdictions corporations can vote. I always assumed (admittedly without knowing for sure) that political voting was restricted to humans everywhere. -- S.K. 13:55, 9 Aug 2004 (UTC)

I had in mind situations as detailed in http://rangi.knowledge-basket.co.nz/gpacts/public/text/2001/se/035se24.html whereby a representative of a corporation can cast a vote on behalf of that corporation under certain circumstances in a local body poll. But I suspect that the wording in the article implies more than I can justify... -- Pedant17 00:47, 10 Aug 2004 (UTC)

Sorry, I forgot about this thread and only now remembered it. I'm by no means a legal expert, but from the webpage you gave I can't see where the connection with a corporation is. The first sentence starts Every parliamentary elector is qualified as a ratepayer elector of a region, a district, or a community if the address for which the person is registered as a parliamentary elector .... For me this implies the whole article is intended only for persons, which I assume to be humans. :-). Am I reading this wrong? -- S.K. 15:10, 19 Aug 2004 (UTC)
In New Zealand law, "person" generally includes corporations (companies and registered societies). They can nominate an individual person to vote in local government polls in respect of any land they own and pay rates on (on the hallowed principle of "no taxation without representation"); the "section 24" linked above says how a parliamentary elector qualifies for enrolment in the name of such a non-individual ratepayer or someone else living outside the voting area but owning land within it - "nominated to be enrolled as a ratepayer elector in respect of property within the region, district, or community, occupied by 1 or more ratepayers, none of whom is qualified as a residential elector within the region, district, or community". Robin Patterson 01:36, 20 Aug 2004 (UTC)
So corporations can vote after all. Very interesting. Thanks for educating me. S.K. 08:22, 20 Aug 2004 (UTC)

[edit] Cooperatives?

Request for description: How does a Cooperative compare with a partnership or LLC?

- That probably depends on the jurisdiction. There may be jurisdictions where a cooperative is a separate form of entity, but I'm not aware of them. In the circumstances that I'm most familiar with (housing cooperatives and utility cooperatives in Colorado), a cooperative takes one of the legal forms provided by the general statutes on corporations and associations -- for example, a corporation, limited liability company, unincorporated non-profit association, or some other such entity. The specific law that applies to the kind of cooperative in question then imposes additional requirements that the entity must meet to receive special treatment as a cooperative. Sometimes those laws require specific kinds of corporate forms; for example, a housing cooperative in Colorado may be a corporation or a LLC, but may not be any kind of partnership or unincorporated association. --Hadleyt 05:02, 19 November 2005 (UTC)

[edit] Names used for corporations in the United States and/or elsewhere

I have noticed that someone has put "No Liability (NL)" and "Unlimited" as valid designations for corporations in the United States. I don't know of any state that uses those terms. Does anyone know where they use these designations? Also, it was my impression that "Unlimited" was simply part of the company name and not a designation indicating a corporate entity. Texas, for example does not use either of those terms. Anyone know?

  • When I added those terms (used mostly in Australia), there was just a single list. Someone has rather hastily (eg without bothering to remove the country-specific phrases that are thereby redundant) and slightly carelessly (as with the two just specified) separated them into country lists. I think separate lists for each country would be better in that country's business articles. The value of the single list was to show the diversity. Robin Patterson 00:14, 28 Jan 2005 (UTC)

[edit] Municipal corporations?

The article currently says cities and townships (often chartered as public corporations) but looking at that article, I don't really see anything there that I think of as a typical municipal corporation. I don't think I know enough to edit this morass of specialized information without making more of a mess of things. All of the articles now relating to various types of corporations and incorporation are all quite confusing, I think in large part because of differences in terminology used in various countries. older≠wiser 13:36, Jan 27, 2005 (UTC)

[edit] Created new page for types of corporations

See types of corporations. The list is extensive and deserves its own article for relevant discussion. I think the Comments section should also follow, but I'm uncertain. Adraeus 05:40, 4 Apr 2005 (UTC)

[edit] Internal competition in large companies

I noticed from personal experience in several different organizations that the local sites of large multinational companies compete against its other local sites. (I cannot write this using my real name/normal Wikipedia userid because I still work for a large multinational company and signed a non-disclosure agreement) Can this be written down somewhere? It also is mentioned also in der Spiegel, nr. 27-06-2005 in an article about the Philips manufactured electric toothbruhes. It is I think, sometimes a good thing for the company as a whole. Thanks 62.163.6.50 2 July 2005 09:27 (UTC)

[edit] Inc.

Does something with Inc. have to be a corperation.

In the US most states require a corporation to use Corporation, Corp, Inc, or Incorporated in thier name to distinguish them.

Actually, I think it's all states but I could be wrong. Also, if you use Inc. if you're not actually an Inc., then that could be construed as some kind of fraud depending upon the circumstances (for example, if you're trying to imply that your company is huge when it's just a sole proprietorship) and then you could be subject to liability for fraud. --Coolcaesar 18:59, 25 January 2006 (UTC)

[edit] Naming convention for Companies and Businesses

I just wanted to draw attention and comment to on a draft poll to determine naming convention for companies and businesses. I have looked around a number of places and have only seen comments to the effect of "we should have a convention" or "do we have a convention" on how to name a XXX company. This has either the effect of drawing a few uninterested comments or a stirring up a heated debate. In either case the net result is generally zero. Your comments to help clarify this poll and later corresponding vote would be greatly appreciated. --Reflex Reaction (talk)• 19:58, 1 February 2006 (UTC)

[edit] Wikipedia:Naming conventions (companies)/poll

Voting has begun and will continue until March 5. Please resolve this lagging issue. --Reflex Reaction (talk)• 22:34, 10 February 2006 (UTC)


It's actually more complex than this. Share value != profit maximization. Directors have a fiducial duty to shareholders, but this does not necessarily mean profit maximization, and courts are loath to question the business judgement of directors.


  1. Profit Maximization. In Anglo-American jurisdictions, for-profit corporations are generally required to serve the best interests of the shareholders, a rule that courts have interpreted to mean the maximization of share value, and thus profits. Corporate directors are prohibited by corporate law from sacrificing profits to serve some other interest, including such areas as environmental protection, or the improvement of the welfare of the community. For example, when Henry Ford cut dividends and reduced car prices in order to increase the number of people who could afford to buy his cars, his brother-in-law, Mr. Dodge, a shareholder, sued him for having harmed profitability: Dodge v. Ford Motor Company, 170 N.W 688 (Mich.S.C. 1919). Mr. Dodge succeeded and went on to form his own car company with the proceeds of the suit. Modern corporate law is settled and clear that corporate directors are only allowed to act in the best interests of the corporation, and that this means maximization of profits (see for example J.A. VanDuzer The Law of Partnerships and Corporations (Irwin Law: 2003, Toronto) at pp. 271-2). Corporations may be able to make charitable contributions to society, but only where this will enable profit maximization (e.g. if the public relations value of the contribution would boost profits more than any other potential use of the funds).

Here is a link

http://www.boalt.org/outlines/Corps/corps_choi_2001fall-1.doc

Among other things it mentions that Dodge v. Ford was an outlier that would likely be covered under the business judgment rule. It also mentions that New York State law explicitly states that corporations can give however much they want to charities.


Found the citation

New York State Cosolidated Laws - Article 2 - Section 202 (12)

(a) Each corporation, subject to any limitations provided in this chapter or any other statute of this state or its certificate of incorporation, shall have power in furtherance of its corporate purposes:

(12) To make donations, irrespective of corporate benefit, for the public welfare or for community fund, hospital, charitable, educational, scientific, civic or similar purposes, and in time of war or other national emergency in aid thereof.

Another citation - Texas Business Corporations Act - Article 2.02

A. Subject to the provisions of Sections B and C of this Article, each corporation shall have power:

(14) To make donations for the public welfare or for charitable, scientific, or educational purposes.

---

Another citation - Delaware Corporations Law Title 8 - Chapter 1 - Subchapter II - Section 122

Every corporation created under this chapter shall have power to:

9) Make donations for the public welfare or for charitable, scientific or educational purposes, and in time of war or other national emergency in aid thereof;


Roadrunner 17:53, 2 February 2006 (UTC)

[edit] Proposed merger

Oppose Corporation is a reasonably global page with a series of short jurisdictional elements. The incorporation page is entirely U.S.-centric and its inclusion on the corporation page would unbalance the national coverage elements. It would be better to retitle the Incorporation page to "Corporation (United States) and, in time, to spin off the other national elements to their own pages. David91 14:26, 23 February 2006 (UTC)

---

[edit] A Different Opposition to Merger

The Corporation page has a great deal of information on the many facets of what a corporation is, how they are operated, and it's history. The Act of Incorporating a business, which the Incorporation page covers, is important enough that it should continue to be developed more as a separate entity to retain the current clarity.

[edit] Oppose merger

Oppose agreeing with both the above. Also Corporation is the much better article. This article needs impovement and renaming it Incorporating (in the US) is not a bad idea. I'll remove the proposed merger sticker in a week or two if nobody objects. Smallbones 09:17, 20 March 2006 (UTC)

yeah

[edit] "Words of limitation"

I was the one who added that phrase to the article several years ago and now I think I screwed up. I thought that's what my Business Associations professor said they were called but I can't find any mention of that in my own notes from the course. Also the term is not in Black's Law Dictionary. Can anyone who knows more about corporate law than I do weigh in on this issue? That is, is there a term of art used to describe the words that must be in a corporate name in order for the corporation to properly assert the privilege of being a corporation? --Coolcaesar 04:13, 4 April 2006 (UTC)

I can only speak for the European jurisdictions: the rule is intended to protect third parties dealing with business entities. Because many of the European states permit complex combinations of business entity, e.g. in Germany, you can have a partnership of limited companies or a limited partnership where the only general partner is a limited company. Unless the set of identifying letters following the business name clearly identifies the nature of the entity, innocent third parties might deal with the entity under a complete misapprehension as to the capacity and potential liability of the entity. Thus, all major sets of laws require the placement of appropriate letters after each business name. In relevant cases, the place of incorporation should also be disclosed on all business correspondence so that third parties can know which set of laws to apply to determine status and capacity. David91 16:45, 5 April 2006 (UTC)
I know that, but is "words of limitation" the correct term for such "appropriate letters"??--Coolcaesar 19:34, 5 April 2006 (UTC)
My apologies for misunderstanding your question. In Europe, the term "words of limitation" refers a wide variety of possible situations: for example: to land transfer transactions in which limitations are placed on the title restricting the use or disposition of the land in some material way; in constitutional and administrative law systems as any general or specific limitation on the exercise of public powers, sometimes even appearing in rules of statutory interpretation to distinguish "words of exposition", etc. Thus, the term cannot be used unambiguously and should always be explained if you wish to avoid reader confusion. And to clarify one further point: the letters that appear after a legal person's name do not specifically refer to corporations in Europe but to all major business forms. Thus, we do not refer to them as "words of limitation" because, in many cases, no corporations will be involved or involved in a way that limits liability. What must or must not be shown on letterheads, business cards and other documents will be specified by each state and there is no uniform term other than as a "publication requirement". Obviously, I do not know what U.S. law is on the point. David91 06:14, 6 April 2006 (UTC)
My brain is working slowly today. I apologise that I forgot to mention that the essential status of the business entity in Europe is not directly affected by the failure to comply with formal requirements as to publication of the required information. The business entity will commit various criminal offences by failing to publish depending on the circumstances and motives, but this will not per se disturb the essential validity of the entity. David91 17:32, 6 April 2006 (UTC)
Well, no one ever confirmed whether "words of limitation" was the correct term or not. As I have been unable to confirm whether this term exists for over four months (and I did search several times), I am deleting the reference to it from the article. --Coolcaesar 05:58, 8 August 2006 (UTC)

[edit] Criticism section too long

I like the idea of having a section on social criticism of the corp in here. On the other hand this looks like it's about 1/3rd of the total article, which looks like about 3 times too long for my taste. Maybe there's no agruing over taste, but for the average reader coming here, I'd guess they are looking for 90% from the top of the article and will be overwhelmed by this last part - so I think it would be more effective for everybody to cut it down.

Chomsky - wonderful, but there also has to be some room to criticize Chomsky's views. I'm not familiar with the movie - but I think the director's name should be upfront. Let's make it effective and to the point, not long drawn out and preachy. Smallbones 14:14, 3 May 2006 (UTC)

Correction: it's only 26% of the article, but it still looks too long to me, and I'd say with only 2 main sources, it's probably unrepresentative of most critisism of corporations. In short the idea of the section is great, but the execution (and length) is wrong. Smallbones 19:22, 6 May 2006 (UTC)

Strongly agree -- at first glance, half the movie's quoted here. Those are long citations as well; I'd say that Chomsky and the movie should get one paragraph each, and anything else could perhaps be put in a "Criticism of Corporations" article. Cory.willis 01:30, 13 May 2006 (UTC)

I've removed the paragraph which discusses how the filmmakers diagnose corporations as being psychopaths. I've seen The Corporation, and while using a psychologist's checklist makes the documentary entertaining, the idea is logically flawed. The film uses different examples of bad corporations to demonstrate different items on the checklist. This is similar to claiming that all humans are psychopaths, because we can find examples of different people who each match one characteristic from the checklist.

This kind of nonsense argument might be acceptable for a documentary, but I think we should use better sources to fill in the criticisms section of this article. --Jonovision 22:44, 13 May 2006 (UTC)

Hey guys, I have a question. I recently wrote the last paragraph in the Criticism section (the one about public health). Someone noted that I must cite a reference backing my claim that corporations tend to make profitable decisions even if they are harmful to public health. Fair enough! However, I don't have a reference that says that--I only have a corporation's website in which they openly talk about their decision processes, and clearly make decisions in a way that backs my claim. Can I use this site as a reference? Must I use it in some special unorthadox way? Help! The site is here. Thanks! Murftown Jul 19, 3:04 AM (UTC)

I think you need to be a bit skeptical of that website. Golden skeletons? Come on - use your head - somebody is pulling your leg (or other bodily parts)! Smallbones 14:52, 19 July 2006 (UTC)
Yes, I found out that it was a hoax by The Yes Men. Sorry about that! I thought I undid all my edits but apparently I may have left one in.

[edit] Length issue

I noticed that the bottom 25% of the article had be cut off (In the middle of Corp Taxation) so I added most of it back. Maybe somebody could go back to the July 5 version and figure out what in Corp. Tax needs to be reinserted? The cut off part included references, catagories, see also and a lot of stuff that I'm sure was not meant to be cut.

But in saving the restored (new top, old bottom) article, the software told me that the article was too long, so apparently the problem may come back. May I suggest that we rationally cut the article down, spin some off to new articles, etc. It really is too long. Smallbones 16:34, 13 July 2006 (UTC)

I've reverted the last edit by 24.60.163.16, which had added the follow text to the Criticism section:

In keeping with the concept of legal personhood; almost all corporations declare their purpose as being "to engage in any lawful business in which a corporation organized in the state may engage." For example the Certificate of Incorporation for internet retailer Amazon.com declares that "The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware."[1]
The "any lawful" language is adequate to overcome any objection that a particular corporate activity is ultra vires (beyond the power of the corporation) because no specific mention thereof has been made in the Certificate.

While being interesting, I don't see what relevance it has to criticisms of corporations. Would the author care to discuss this? --Jonovision 12:08, 15 August 2006 (UTC)

[edit] Equivalent to UK Ltd Company?

My understanding, having had a vague idea and now reading up on it, is that a Corporation on other countries (most notably the US) is pretty mich analogous to a limited company in the UK. Presuming i'm correct, i was wondering if there's a standard means of getting that info into the article in a form that's quick and easy to find? If i'm not, i'd presume it's a reliatively widely-held belief, and maybe something needs to go in to that effect, too? -- Lordandmaker 02:44, 7 December 2006 (UTC)


[edit] Query: Point of Clarification re: SoPac Railroad case

From the article as it stands (as of 20061208): "Contrary to accepted legal precedent, the U.S. Supreme Court did not rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad."

I'm not sure what this means, and hope someone can rephrase it for greater clarity.

Would the idea be more accurately paraphrased as

"Contrary to conventional wisdom, the U.S. Supreme Court did not rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad.""

or perhaps

"Though later cases refer to this case as precedential, the U.S. Supreme Court did not actually rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad."

or maybe

"Contrary to then-accepted legal precedent, the U.S. Supreme Court chose not to rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad."

(Or something else again?)

My suspicion is that the first of these is closest to the truth, but that's not a case I'm yet familiar with -- I just know that I'm confused by the current description :)



Cheers --

timbo 14:50, 8 December 2006 (UTC)

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