Corporation, an organization
Corporation, an organization, recognized and created by law, that allows people to associate together for a common purpose under a common name. The corporation is a key economic institution, even though it is not the most prevalent form of business organization.
Business corporations are known as joint-stock companies because they are jointly owned by different people who receive shares of stock in exchange for an investment of money in the venture. In business, corporate organization has a number of advantages. First, a corporation exists independently of its owners (the stockholders). Second, in British law (and that of many other countries) the corporation is recognized as a legal person with many of the same rights that individuals have. These include the right to buy and sell property, to sue and be sued, and to enter into contracts. Third, the corporation is an enormously successful device for raising vast amounts of business capital by pooling the financial resources of thousands of individuals, something that cannot be done by other forms of business organizations (the individual proprietorship and the partnership). This also serves to spread the risks of a new venture among many people. Finally, the owners of a corporation are not liable for its debts beyond their investment.