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A corporation is a legal entity treated as an individual and is created through legal means. It is subject to the laws of the state and has its own set of privileges and liabilities apart from the members of its body. Corporations come in many form but its popular form is intended to conduct business. They were once created by charter passed by legitimate body. There are now jurisdictions that acknowledge its formation through registration.

Setting up a corporation is popular among start-up businessman. There are many benefits of choosing a corporation rather than a sole proprietorship and one of the most important is its limited liability. If a corporation loses its sustainability and goes down, there is a high chance that all of its shareholders will lose their investments. Senior employees also may lose their position and they cannot blame or point a finger to anyone except to the corporation itself. Neither the shareholders nor employees are held responsible for any debts incurred by the corporation to its creditors.

Although a corporation is not a natural human being, they gain the privilege of exercising human rights and are treated equally as a citizen of the state. They also have their own set of responsibilities and like any other citizen, the will held responsible for any human rights violations they incur. They are capable of criminal offenses and be declared as a convict by the court. They are virtually immortal and usually have a longer life span than their original owners. A corporation can only cease to exist if a formal dissolution is called either by a court order or by the shareholders themselves. Insolvency occurs when a corporation is forced to die by the creditors under a court order and all its assets will be liquidated to serve as a payment for its debts. However, most of the time, insolvency will result to a restructuring of the company holdings instead of a complete dissolution.

In recent times, merging of companies has been a common practice to lessen competition and to increase the overall benefit of the shareholders. Big corporations began to influence policy making and the state cannot overlook their important role as an economic asset. Some big corporations work with the government to increase their overall interest and to be able to hold their ground firmly. They set up programs that will benefit the government and the state and at the same time increase the trust of the consumers in their services. These companies either focus on energy conservation, cultural preservation, social ethics, political stability and promotion of tourism.

Farrell is a businessman who loves to share his ideas about business strategies. He is currently fascinated with the strategic management services offered by Jigsaw Concepts.

By Farrell John T Conejos
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