Characteristics of the corporation
There are several basic characteristics which are attributed to the “corporation in the whole sense of the word”. These characteristics distinguish corporations from other forms of organizations. These characteristics are the following:
1. Corporate members
2. Doing business and distributing profits as an object
3. Perpetual existence (succession)
4. Centralized management
5. Limitation of liability only to corporate assets
6. Corporate rights are freely transferable
The question, whether a certain corporation can be classified as an association of individuals, should be solved with regard for presence or absence of every characteristic mentioned supra.
…members of the corporation and the objective to do business for joint profit are the essential elements of every business organization.
Organization has a perpetual existence, unless death, insanity, insolvency, retirement on a pension or check out, or expulsion of any of the members lead to the dissolution of this organization.
Organization is supposed to have centralized management if one person (or group of persons which does not include all members) holds a long-term exclusive authority to take managerial decisions necessary for transacting a business which is the objective of the corporation.
Centralized management can be accomplished through election, appointment resulting from absent voting or any other procedure of appointment. As a result, exclusive managerial power is concentrated in the hands of a management team.
Organization is supposed to have a limited liability if neither of her members bears personal liability for the debts of the organization or claims against it under the law applicable in this region.
The corporate rights are supposed to be freely transferable, if all its members or those members who possess a substantial share of interest in the organization, have the authority to substitute themselves by the third parties, who are not...