ABSTRACT
The contemporary world includes the growth and influence of huge corporations across the globe. In general terms, a corporation refers to a legal entity chartered by the state with rights and responsibilities apart from the persons running or working for the corporation. For example, a corporation can be sued in a court of law without the individuals working for the corporation being sued. Business corporations take a variety of forms, but the most common types have shareholders, also called stockholders, who own the corporation by purchasing shares in the company. Shareholders typically retain claim-rights to sell their shares and receive returns on the profits of the corporation. Shareholders have limited control over the firm’s operations, apart from a right to nominate and vote for a board of directors. The role of the board of directors is to oversee the management of the corporation. An historically important feature of shareholder rights is a legal principle of limited liability, which means that shareholders are typically immune from paying any debts of the corporation beyond their initial investment in purchasing shares. This immunity has helped corporations raise large sums of money from investors whose personal finances are legally protected from corporate debt collectors. The property concepts introduced in Chapter 2 (claims, liberties, powers, and immunities) are important for investigating the complex property rights of corporations; the field of corporate law is the study of the financial and governance functions of corporations as defined by the state.
