A corporation is a legal entity (technically, a juristic person) which has a separate legal personality from its workers, bondholders, shareholders and so on.  The corporation has certain legal abilities and obligations

(i) the ability to sue and be sued,

(ii) the ability to hold assets in its own name,

(iii) the ability to hire employees,

(iv) the ability to sign contracts, and

(v) the ability to make by-laws, which govern its                                       internal affairs.

Currently, the modern business corporation is the dominant type of corporation. Some important legal characteristics of a corporation include

(i) transferable shares,

(ii) perpetual life, and

(iii) limited liability.

The regulations most favorable to incorporation include:

Limited liability

Unlike in a partnership or sole proprietorship, shareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations. As a result their potential losses cannot exceed the amount which they contributed to the corporation as dues or paid for shares. Limited liability regulations enable corporations to socialize their costs for the primary benefit of shareholders. The economic rationale for this lies in the fact that it allows anonymous trading in the shares of the corporation by virtue of eliminating the corporation's creditors as a stakeholder in such a transaction. Without limited liability, a creditor would not likely allow any share to be sold to a buyer of at least equivalent creditworthiness as the seller. Limited liability further allows corporations to raise tremendously more funds for enterprises by combining funds from the owners of stock. Limited liability reduces the amount that a shareholder can lose in a company. This in turn greatly reduces the risk for potential shareholders and increases both the number of willing shareholders and the amount they are likely to invest.

Perpetual lifetime

Another favorable regulation, the assets and structure of the corporation exist beyond the lifetime of any of its shareholders, bondholders, or employees. This allows for stability and accumulation of capital, which thus becomes available for investment in projects of a larger size and over a longer term than if the corporate assets remained subject to dissolution and distribution. It is important to note that the "perpetual lifetime" feature is an indication of the unbounded potential duration of the corporation's existence, and its accumulation of wealth and thus power.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .