Corporation “Legally” Defined

The following definitions for “corporation” are taken from Ballantine’s Law Dictionary (3rd edition), Bouvier’s Law Dictionary (6th edition), Black’s Law Dictionary (2nd edition) and Webster’s Dictionary (1828):

 

 

(Ballantine’s)

 

An artificial being, invisible, intangible, and existing only in contemplation of law; an association of persons to whom the sovereign has offered a franchise to become an artificial juridicial person, with a name of its own, under which they can act and contract and sue and be sued, and who have either accepted the offer and effected a corporation in substantial conformity with its terms (in which case a corporation de jure has been constituted) or have done acts indicating a purpose to accept such offer and effected an organization designed to be, but, in fact not, in substantial conformity with its terms (in which case a corporation de jure de facto has been constituted) [18 Am J2d Corp § 1].

  • For some purposes, as in a venue statute, the term “corporation” includes unincorporated associations or at least special forms of them, such as joint stock companies [5 Am J1st Ven § 7].

  • For the purposes of the Federal income tax, the term “corporation” includes associations, joint-stock companies, and insurance companies [33 Am J2d Fed Tax ¶ 2005].

  • As defined by the Bankruptcy Act, the term “corporation” includes all bodies having any of the powers and privileges of private corporations not possessed by individuals or partnership and further includes partnership associations organized under laws making the capital subscribed alone responsible for the debts of the association, joint-stock compmies, unincorporated companies and associations, and any business conducted by a trustee or trustees wherein beneficial interest or ownership is evidenced by certificate or other written instrument. [Bankr Act § 1(8); 11 USC § 1(8)]. Business trusts have frequently been held to be subject to statutory regulations of corporations and to provisions aimed primarily at corporations [Hernphill v. Orloff, 277 US 537, 72 L Ed 978, 48 S Ct 577].

 

(Bouvier’s)

 

  1. An aggregate corporation is an ideal body, created by law, composed of individuals united under a common name, the members of which succeed each other, so that the body continues the same, notwithstanding the changes of the individuals who compose it, and which for certain purposes is considered as a natural person. Browne’s Civ. Law, 99; Civ. Code of Lo/ art. 418; 2 Kent’s Com. 215. Mr. Kyd, (Corpor. Vol. 1, p. 13) defines a corporation as follows: “A corporation, or body politic, or body incorporate, is a collection of many; individuals united in one body, under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law, with a capacity of acting in several respects as an individual, particularly of taking and granting property, contracting obligations, and of suing and being sued; of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation, or at any subsequent period of its existence.” In the case of Dartmouth College against Woodward [4 Wheat. Rep. 626], Chief Justice Marshall describes a corporation to be “an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law,” continues the judge. “it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and if the expression may be allowed, individuality properties by which a perpetual succession of many persons are considered, as the same, and many act as the single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyance for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use.” [See 2 Bl. Corn. 37].

  2. The words corporation and incorporation are frequently confounded, particular in the old books. The distinction between them is, however, obvious; the one is the institution itself, the other the act by which the institution is created.

  3. Corporations are divided into public and private.

  4. Public corporations, which are also called political, and sometimes municipal corporations, are those which have for their object the government of ‘a portion of the state; [Civl Code of Lo. art. 420] and although in such case it involves some private interests, yet, as it is endowed with a portion of political power, the term public has been deemed appropriate.

  5. Another class of public corporations are those which are founded for public, though not for political or municipal purposes, and the, whole interest in which belongs to the government. The Bank of Philadelphia, for example, if the whole stock belonged exclusively to the government, would be a public corporation; but inasmuch as there are other owners of the stock, it is a private corporation [Domat’s Civil Law, – 452 2 Wheat. R. 668; 9 Wheat. R. 907 8 M’Cord’s R. 3777 1 Hawk’s R. 36, 2 Kent’s Corn. 222].

  6. Nations or states, are denominated by publicists, bodies politic, and are said to have their affairs and interests, and to deliberate and resolve, in common. They thus become as moral persons, having an understanding and will peculiar to themselves, and are susceptible of obligations and laws [Vattel, 49]. In this extensive sense the United States may be termed a corporation; and so may each state singly [Per Iredell, J. 3 Dall. 447].

  7. Private corporations: In the popular meaning of the term, nearly every corporation is public, inasmuch as they are created for the public benefit; but if they whole interest does not belong to the government, or if the corporation is not created for the administration of political or municipal power, the corporation is private. A bank, for instance, may be created by the government for its own uses; but if the stock is owned by private persons, it is a private corporation, although it is created by the government, and its operations partake of a private nature [9 Wheat. R. 907]. The rule is the same in the case of canal, bridge, turnpike, insurance companies, and the like. Charitable or literary corporations, founded by private benefaction, are in point of law private corporations, though dedicated to public charity, or for the general promotion of learning [Ang. & Ames on Corp. 22].

  8. Private corporations are divided into ecclesiastical and lay.

  9. Ecclesiastical corporations, in the United States, are commonly called religious corporations they are created to enable religious societies to manage with more facility and advantage, the temporalities belonging to the church or congregation.

  10. Lay corporations are divided into civil eleemosynary. Civil corporations are created for an infinite variety of temporal purposes, such as affording facilities for obtaining loans of money; the making of canals, turnpike roads, and the like. And also such as are established for the advancement of learning [1 Bl. Com. 471].

  11. Eleemosynary corporations are such as are instituted upon a principle of charity, their object being the perpetual distribution of the bounty of the founder of them, to such persons as he has directed. Of this kind are hospitals for the relief of the impotent, indigent and sick, or deaf and dumb [1 Kyd on Corp. 26; 4 Conn. R. 272; Angell & A. on Corp. 26].

  12. Corporations, considered in another point of view, are either sole or aggregate.

  13. A sole corporation, as its name implies, consists of only one person, to whom and his successors belongs that legal perpetuity, the enjoyment of which is denied to all natural persons [1 Black Com. 469]. Those corporations are not common in the United States. In those states, however, where the religious establishment of the church of England was adopted, when they were colonies, together with the common law on that subject, the minister of the parish was seized of the freehold, as persona ecclesia, in the same manner as in England; and the right of his successors to the freehold being thus established was not destroyed by the abolition of the regal government, nor can it be divested even by an act of the state legislature [9 Cranch, 828].

  14. A sole corporations cannot take personal property in succession; its corporate capacity of taking property is confined altogether to real estate [9 Crancb, 43].

  15. An aggregate corporation consists of several persons, who are united in one society, which is continued by a succession of members. Of this kind are the mayor or commonalty of a city; the heads and fellows of a college; the members of trading companies, and the like [1 Kyd on Corp. 76; 2 Kent’s Com. 221 Ang. & A. on Corp. 20. See, generally, Bouv. Inst. Index, h.t.].

 

(Black’s)

 

An artificial person or legal entity created by or under the authority of the laws of a state or nation, composed, in some rare instances, of a single person and his successors, being the incumbents of a particular office, but ordinarily consisting of an association of numerous individuals, who subsist as a body politic under a special denomination, which is regarded in law as having a personality and existence distinct from that of its several members, and which is, by the same authority, bested with the capacity of the continuous succession, irrespective of changes in its membership, either in perpetuity or for the limited term of years, and of acting as a unit or single individual in matters relating to the common purpose of the association, within the scope of the powers and authorities conferred upon such bodies of law [see of Sutton’s Hospital, 10 Coke, 32; Dartmouth College v. Woodward, 4 Wheat. 518, 636, 657, 4 L. Ed. 629; U.S. v. Trinidad Coal Co., 137 U.S. 160, 11 Sup. Ct. 57, 34 L. Ed. 640; Andrews Bros. Co. v. Youngstown Coke Co., 86 Fed. 585, 30 C.C.A. 293; Porter v. Railroad Co., 76 Ill. 573; State v. Payne, 129 Mo. 468, 31 S.W. 797, 33 L.R.A. 576; Farmers’ L. & T. Co. v. New York, 7 Hill (N.Y.) 283; State v. Turley, 142 Mos. 403, 44 S.W. 267; Barber v. International Co., 73 Conn. 587, 48 Atl. 758; Sovereign Camp v. Fraley, 94 Tex. 200, 59 S.W. 905, 51 L.R.A. 898; Sellers v. Greer, 172 Ill. 549, 50 N.E. 246; 40 L.R.A. 589; Old Colony, etc. Co. v. Parker, etc., Co., 183 Mass. 557, 67 N.E. 870; Warner v. Beers, 23 Wend. (N.Y.) 103, 129, 142].

 

A franchise possessed by one or more individuals, who subsist as a body politic, under a special denomination, and are vested by a policy of the law with the capacity of perpetual succession, and of acting in several respects, however numerous the association may be, as a single individual [2 Kent, Comm. 267].

 

An artificial person or being, endowed by law with the capacity of perpetual succession; consisting either of a single individual, (termed a “corporation sole,”) or of a collection of several individuals, (which is termed a “corporation aggregate.”) [2 Steph. Comm. 166; 1 Bl. Comm. 467, 469].

 

A corporations is an intellectual is an intellectual body, created by law, composed of individuals united under a common name, the members of which succeed each other, so that the body continues always the same, notwithstanding the change of the individuals who compose it, and which, for certain purposes, is considered a natural person [Civil Code La. art. 427].

 

Classification: according to the accepted definitions and rules, corporations are classified as follows:

  • Public and private: a public corporation is one created by the state for political purposes and to act as an agency in the administration of civil government, generally within a particular territory or subdivision of the state, and usually invested, for that purpose, with subordinate and local powers of legislation; such as a county, city, town, or school district. These are also sometimes called “political corporations.” [People v. McAdams, 82 Ill. 356; Wooster v. Plymouth, 62 N.H. 208; Goodwin v. East Hartford, 70 Conn. 18, 38 Atl. 876; Dean v. Davis, 51 Cal. 409; Regents v. Williams, 9 Gill & J. (Md.) 401, 31 Am. Dec. 72; Ten Eyck v. Canal Co., 18 N.J. Law, 200, 37 Am. Dec. 233; Toledo Bank v. Bond, 1 Ohio St. 622; Murphy v. Mercer County, 57 N.J. Law, 245, 31 Atl. 229]. Private corporations are those founded by and composed of private individuals, for private purposes, as distinguished from government purposes, and having no political or governmental franchises or duties [Santa Clara County v. Southern Pac. R. Co. (C.C.) 18 Fed. 402; Swan v. Williams, 2 Mich. 434; People v. McAdams, 82 Ill. 361; McKim v. Odom, 3 Bland (Md.) 418; Rundle v. Canal Co., 21 Fed. Cas. 6].

    • The true distinction between public and private corporations is that the former are organized for governmental purposes, the latter not. The term “public” has sometimes been applied to corporations of which the government owned the entire stock, as in the case of state bank. But bearing in mind that “public” is here equivalent to “political,” it will be apparent that this is a misnomer. Again the fact that the business of operations of a corporation may directly and very extensively affect the general public (as in the case of a railroad company or a bank or an insurance company) is no reason for calling it a public corporation. If organized by private persons for their own advantage, – or even if organized for the benefit of the public generally, as in the case of a free public hospital or other charitable institution. – it is none the less a private corporation, if it does not possess governmental powers or functions. The uses may in a sense be called “public,” but the corporation is “private,” as much so as if the franchises were vested in a single person [Dartmouth College v. Woodward, 4 Wheat. 562, 4 L. Ed. 629; Ten Eyck v. Canal Co., 18 N. J. Law. 204, 37 Am. Dec. 233]. It is to be observed, however, that those corporations which serve the public or contribute to the comfort and convenience of the general public, though owned and managed by private interests, are now (and quite appropriately) denominated “public-service corporations.” Another distinction between public and private corporations is that the former are not voluntary associations (as the latter are) and that there is no contractual relation between the government and a public corporation or between the individuals who compose it [Mor. Priv. Corp. § 3; Goodwin v. East Hartford, 70 Conn. 18, 38 Atl. 876].

    • The terms “public” and “municipal,” as applied to corporations, are not convertible. All municipal are public, but not vice versa. Strictly speaking, only cities and towns are “municipal” corporations, though the term is very commonly so employed as to include also counties and such governmental agencies as school districts and road districts [Brown v. Board of Education, 108 Ky. 783, 57 S.W. 612]. But there may also be “public” corporations which are not “municipal” even in this wider sense of the latter term. Such, according to some of the authorities, are the “irrigation districts” now known in several of the western states [Irrigation Dist. v. Collins, 46 Neb. 4111, 64 N.W. 1086; Irrigation Dist. v. Peterson, 4 Wash. 147, 29 Pac. 995. Compare Herring v. Irrigation Dist. (C.C.) 95 Fed. 705].

  • Ecclesiastical and lay: in the English law, all corporations private are divided into ecclesiastical and lay, the former being such corporations as are composed exclusively of ecclesiastics organized for spiritual purposes, or for administering property held for religious uses, such as bishops and certain other dignitaries of the church and (formerly) abbeys and monasteries [1 Bl. Comm. 470]. Lay corporations are those composed of laymen, and existing for secular or business purposes. This distinction is not recognized in American law. Corporations formed for the purpose of maintaining or propagating religion or of supporting public religious services, according to the rites of particular denominations, and incidentally owning and administering real and person property for religious uses, are called “religious corporations,” as distinguished from business corporations; but they are “lay” corporations, and not “ecclesiastical” in the sense of the English law [Robertson v. Bullions, 11 N. Y. 243].

  • Eleemosynary and civil: lay corporations are classified as “eleemosynary” and “civil;” the former being such as are created for the distribution of alms or for the administrations of charities or for purposes falling under the description of “charitable” in its widest sense, including hospitals, asylums, and colleges; the latter being organized for the facilitating of business transactions and the profit or advantage of the members [1 Bl. Comm. 471; Dartmouth College v. Woodward, 4 Wheat 660, 4 L. Ed. 629].

    • In the law of Louisiana, the term “civil” as applied to corporations, is used in a different sense, being contrasted with “religious” Civil corporations are those which relate to temporal police; such are the corporations of the cities, the companies for the advancement of commerce and agriculture, literary societies, colleges or universities founded for the instruction of youth, and the like. Religious corporations are those whose establishment relates only to religion; such are the congregations of the different religious persuasions [Civ. Code La. art 431].

  • Aggregate and sole: a corporation sole is one consisting of one person only, and his successors in some particular station, who are incorporated by law in order to give them some legal capacities and advantages, particularly that of perpetuity, which in their natural persons they could not have had. In this sense, the sovereign in England is a sole corporation, so is a bishop, so are some deans distinct from their several chapters, and so is every parson and vicar [3 Steph. Comm. 168, 169; 2 Kent, Comm. 273. Warner v. Beers, 23 Wend. (N.Y.) 172; Codd v. Rathbone, 19 N.Y. 39; First Parish v. Dunning, 7 Mass. 447]. A corporation aggregate is one composed of a number of individuals vested with corporate powers; and a “corporation,” as the word is used in general popular and legal speech, and as defined at the head of this title, means a “corporation aggregate.”

  • Domestic and foreign: with reference to the laws and the courts of any given state, a “domestic” corporation is one created by, or organized under, the laws of that state; a “foreign” corporation is one created by or under the laws of another state, government, or country [In re Grand Lodge, 110 Pa. 613, 1 Atl. 582; Boley v. Trust Co., 12 Ohio St. 143; Bowen v. Bank, 34 How. Prac. (N.Y.) 411].

  • Close and open: a “close” corporation is one in which the directors and officers have the power to fill vacancies in their own number, without allowing to the general body of stockholders any choice or vote in their election. An “open” corporation is one in which all the members or corporators have a vote in their election of the directors and other officers [McKim v. Odom, 3 Bland (Md.) 416].

  • Other compound and descriptive terms: a business corporation is one formed for the purpose of transacting business in the widest sense of that term, including not only trade and commerce, but manufacturing, mining, banking, insurance, transportation, and practically every form of commercial or industrial activity where the purpose of the organization is pecuniary profit; contrasted with religious, charitable, educational, and other like organizations, which are sometimes grouped in the statutory law of a state under the general designation of “corporations not for profit.” [Winder v. Railroad Co., 30 Fed. Cas. 329; In re Independent Ins. Co., 13 Fed. Cas. 13; McLeod v. College, 69 Neb. 550; 96 N.W. 265]

  • Corporation de facto: one existing under color of law and in pursuance of an effort made in good faith to organize a corporation under the statute; an association of men claiming to be a legally incorporated company, and exercising the powers and functions of a corporation, but without actual lawful authority to do so [Foster v. Hare, 26 Tex Civ. App. 177, 62 S.W. 541; Attorney General v. Stevens, 1 N.J. Eq. 378, 22 Am. Dec. 526; Manufacturing Co. v. Schofield, 28 Ind. App. 95, 62 N.E. 106; Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa 234, 91 N.W. 1081; Johnson v. Okerstrom, 70 Minn. 303, 72 N.W. 147; Tulare Irrig. Dist. v. Shepard, 185 U.S. 1, 22 Sup. Ct. 531, 46 L.Ed. 773; In re Gibbs’ Estate, 157 Pa. 59, 27 Atl. 383, 22 L.R.A. 276; Pape v. Bank, 20 Kan. 440, 27 Am. Rep. 183].

  • Joint-stock corporation: this differs from a joint-stock company in being regularly incorporated, instead of being a mere partnership, but resembles it in having a capital divided into shares of stock. Most business corporations (as distinguished from eleemosynary corporations) are of this character.

  • Moneyed corporations are, properly speaking, those dealing in money or in the business of receiving deposits, loaning money, and exchange; but in the wider sense the term is applied to all business corporations having a money capital and employing it in the conduct of their business [Mutual Ins. Co. v. Erie County, 4 N.Y. 444; Gillet v. Moody, 3 N.Y. 487; Vermont Stat. 1894, § 3674; Hill v. Reed, 16 Barb. (N.Y.) 287; In re California Pac. R. Co., 4 Fed. Cas. 1,060; Hobbs v. National Bank, 101 Fed. 75, 41 C. C. A. 205].

  • Municipal corporations: [see that title]

  • Public-service corporations: those whose operations serve the needs of the general public or conduce to the comfort and convenience of an entire community, such as railroads, gas, water, and electric light companies. The business of such companies is said to be “affected with a public interest,” and for that reason they are subject to legislative regulation and control to a greater extent than corporations not of this character.

  • Quasi corporations: organizations resembling corporations; municipal societies or similar bodies which, though not true corporations in all respects, are yet recognized, by statutes or immemorial usage, as persons or aggregate corporations, with precise duties which may be enforced, and privileges which may be maintained, by suits at law. They may be considered quasi corporations, with limited powers, co-extensive with the duties imposed upon them by statute or usage, but restrained from a general use of the authority which belongs to those metaphysical persons by the common law [Scates v. Kings, 110 Ill. 456; Adams v. Wiscasset Bank, 1 Me. 361, 1 Am. Dec. 88; Lawrence County v. Railroad Co., 81 Ky. 227; Barnes v. District of Columbia, 91 U.S. 552, 23 L. Ed. 440].

    • This term is lacking in definiteness and precision. It appears to be applied indiscriminately (a) to all kinds of municipal corporations, the word “quasi” being introduced because it is said that these are not voluntary organizations like private corporations, but created by the legislature for its own purposes and without reference to the wishes of the people of the territory affected; (b) to all municipal corporations except cities and incorporated towns, the latter being considered the only true municipal corporations because they exist and act under charters or statutes of incorporation while counties, school districts, and the like are merely created or set off under general laws; (c) to municipal corporations possessing only a low order of corporate existence or the most limited range of corporate powers, such as hundreds in England, and counties, villages, and school districts in America.

  • Quasi public corporation: this term is sometimes applied to corporations which are not strictly public, in the sense of being organized for governmental purposes, but whose operations contribute to the comfort, convenience, or welfare of the general public, such as telegraph and telephone companies, gas, water, and electric light companies, and irrigation companies. More commonly and more correctly styled “public-service corporations.” [See Wiemer v. Louisville Water Co. (C.C.) 130 Fed. 251; Cumberland Tel. Co. v. Evansville (C.C.) 127 Fed. 187; McKim v. Odom, 3 Bland (Md.) 419; Campbell v. Watson, 62 N.J. Eq. 396, 50 Atl. 120].

  • Spiritual corporations: corporations, the members of which are entirely spiritual persons, and incorporated as such, for the furtherance of religion and perpetuating the rights of the church.

  • Trading corporations: a trading corporation is a commercial corporation engaged in buying and selling. The word “trading,” is much narrower in scope than “business,” as applied to corporations, and though a trading corporation is a business corporation, there are many business corporations which are not trading companies [Dartmouth College v. Woodward, 4 Wheat. 669, 4 L. Ed. 629; Adams v. Railroad Co., 1 Fed. Cas. 92].

  • Tramp corporations: companies chartered in one state without any intention of doing business therein, but which carry on their business and operations wholly in other states [State v. Georiga Co., 112 N.C. 34, 17 S.E. 10, 19 L.R.A. 485].

  • Synonyms: the words “company” and “corporation” are commonly used as interchangeable terms. In strictness, however, a company is an association of persons for business or other purposes, embracing a considerable number of individuals, which may or may not be incorporated. In the former case, it is legally a partnership or a joint-stock company; in the latter case, it is properly called a “corporation.” [Goddard v. Railroad Co., 202 Ill. 362, 66 N.E. 1066; Bradley Fertilizer Co. v. South Pub. Co., 4 Misc. Rep. 172, 23 N.Y. Supp. 675; Com. v. Reinoehl, 163 Pa. 287, 29 Atl. 896, 25 L.R.A. 247; State v. Mead, 27 Vt. 722; Leader Printing Co. v. Lowry, 9 Okl. 89, 59 Pac. 242; for the particulars in which corporations differ from “Joint -Stock Companies” and “Partnerships,” see those titles.

 

(Webster’s)

 

CORPORATION, n.

A body politic or corporate, formed and authorized by law to act as a single person; a society having the capacity of transacting business as an individual. Corporations are aggregate or sole. Corporations aggregate consist of two or more persons united in a society, which is preserved by a succession of members, either forever, or till the corporation is dissolved by the power that formed it, by the death of all its members, by surrender of its charter or franchises, or by forfeiture. Such corporations are the mayor and aldermen of cities, the head and fellows of a college, the dean and chapter of a cathedral church, the stockholders of a bank or insurance company, &c. A corporation sole consists of one person only and his successors, as a king or a bishop.

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