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1 Lecture 3a The Corporation Form and Other Ways of Organizing Production: Legal Background Start with corporate form: What is a corporation? 5 core characteristics of corporations: •separate legal identity •limited liability •transferable shares •delegated management with a board structure •investor ownership (Note: some of these characteristics also apply to other forms of organization.) Look at each of these separately: 1.Separate legal persona:this means that the firm is a separate entity that can own assets and enter into contracts, separate from its owners and managers. Note: firms can produce without being incorporated.
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