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SUMMARY: In this chapter, we learned that corporations are legal entities in the eyes of the law. They can borrow money, enter into contracts, own property, and sue and be sued like individuals. The operations of corporations are carried out independent of any individual member. Stockholder ownership of corporation has become prevalent since owners have limited liability as compared to sole proprietorship and partnership firms.
Changes that occurred at every stage helped corporations to establish their own perpetuity and growth. As corporations started growing, they acquired certain characteristic features that distinguished them from other business organizations.
The four important features of a corporation are, limited liability for investors, free transferability of investor interests, legal status as "person" and centralized management.
A corporation is considered to be one of the most pervasive elements in society that influences everyday life. It determines the quality of life by serving different purposes, i.e. it strives for human satisfaction by building long lasting social structure. The corporate structure is utilized towards achieving efficiency and efficacy while serving society. By being ubiquitous and flexible, corporations aim at giving individuals a long-lasting result.
Moreover, a corporation maintains identity as an individual and thus seeks protection from law. Corporation as 'persons' and 'moral person' play a significant role in achieving business objectives, morally. A corporation also works for the welfare of a society by providing employment opportunities, meeting the interests of various groups such as employees, shareholders, customers, suppliers, creditors, etc. To the end the chapter discusses the expectations of the society and the market from a corporation.