Definition: A corporation is made up of a group of people who are permitted by law to function as just one person, and has liabilities and privileges that are separate from the individual people who constitute the corporation.
A corporation is a legal body that has been established as a separate legal entity from its members and which has its own distinct rights and liabilities. Corporations are mainly used for business purposes, but can be found in many forms.
A business corporation typically has four basic properties.
First of all, corporations normally have transferable shares plus a centralized management with a board structure.
Additionally, they usually have:
Limited liability: This is a critical characteristic of business corporations. What it entails is that if the corporation goes bankrupt, the stockholders can only lose their investment and employees can only to lose their jobs, i.e. they are not further responsible for debts still owed to the creditors of the corporation.
Legal personality: Corporations are by law stipulated to have liabilities and rights in the same way as individual persons ("people"). As a consequence, corporations can exercise human rights against actual individuals and the state, and they may themselves be guilty of violations of human rights. In fact, they may even be charged with criminal offenses such as manslaughter and fraud.
In theory, corporations cannot die. However, if a corporation is dissolved, it may, in fact, legally "die".