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The word "corporation" derives from
the Latin word for a "body of people."
Entities which carried on business and were the
subjects of legal rights were found in
ancient Rome, and the Maurya Empire in ancient
India. In medieval Europe, churches
became incorporated, as did local governments,
such as the Pope and the City of
London Corporation. The point was that the
incorporation would survive longer than
the lives of any particular member, existing in
perpetuity. The oldest commercial
corporation in the world, the Stora Kopparberg
mining community in Falun, Sweden,
obtained a charter from King Magnus Eriksson in
1347. Many European nations
chartered corporations to lead colonial
ventures, such as the Dutch East India
Company or the Hudson's Bay Company, and these
corporations came to play a large
part in the history of corporate colonialism.
A corporation is a legal entity that is created
under the laws of a state designed
to establish the entity as a separate legal
entity having its own privileges and
liabilities distinct from those of its members.
There are many different forms of
corporations, most of which are used to conduct
business. Early corporations were
established by charter. Most jurisdictions now
allow the creation of new corporations
through registration. An important contemporary
feature of a corporation is limited
liability. If a corporation fails, shareholders
normally only stand to lose their
investment and employees will lose their jobs,
but neither will be further liable for
debts that remain owing to the corporation's
creditors.17
Despite not being natural persons, corporations
are recognized by the law to
have rights and responsibilities like natural
persons ("people"). Corporations can
exercise human rights against real individuals
and the state, and they can themselves
be responsible for human rights violations.
Corporations are conceptually immortal
but they can "die" when they are
"dissolved" either by statutory operation, order of
court, or voluntary action on the part of shareholders.
Insolvency may result in a form
of corporate 'death', when creditors force the
liquidation of the corporation under
court order, but it most often results in a
restructuring of corporate holdings.