Introduction: Corporation—General Characteristics and Formation

Learning Objectives

After reading this chapter, you should understand the following:

  • The historical background of the corporation
  • How partnerships compare with corporations
  • What the corporation is as a legal entity, and how corporate owners can lose limited liability by certain actions
  • How corporations are classified


The corporation is the dominant form of the business enterprise in the modern world. As a legal entity, it is bound by much of the law discussed in the preceding chapters. However, as a significant institutional actor in the business world, the corporation has a host of relationships that have called forth a separate body of law.

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