Corporations

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Background

A corporation is an organization - usually a group of people or a company - authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and recognized as such in law for certain purposes. Early incorporated entities were established by charter (i.e. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are usually divided by the law of the jurisdiction where they are chartered based on two aspects: by whether they can issue stock, or by whether they are formed to make a profit. Depending on the number of owners, a corporation can be classified as aggregate (the subject of this article) or sole (a legal entity consisting of a single incorporated office occupied by a single natural person).

One of the most attractive early advantages business corporations offered to their investors, compared to earlier business entities like sole proprietorships and joint partnerships, was limited liability. Limited liability means that a passive shareholder in a corporation will not be personally liable either for contractually agreed obligations of the corporation, or for torts (involuntary harms) committed by the corporation against a third party. Limited liability in contract is uncontroversial because the parties to the contract could have agreed to it and could agree to waive it by contract. However, limited liability in tort remains controversial because third parties do not agree to waive the right to pursue shareholders. There is significant concern that limited liability in tort may lead to excessive corporate risk taking and more harm by corporations to third parties.

Where local law distinguishes corporations by their ability to issue stock, corporations allowed to do so are referred to as stock corporations; one type of investment in the corporation is through stock, and owners of stock are referred to as stockholders or shareholders. Corporations not allowed to issue stock are referred to as non-stock corporations; i.e. those who are considered the owners of a non-stock corporation are persons (or other entities) who have obtained membership in the corporation and are referred to as a member of the corporation. Corporations chartered in regions where they are distinguished by whether they are allowed to be for-profit are referred to as for-profit and not-for-profit corporations, respectively.

There is some overlap between stock/non-stock and for-profit / not-for-profit in that not-for-profit corporations are always non-stock as well. A for-profit corporation is almost always a stock corporation, but some for-profit corporations may choose to be non-stock. To simplify the explanation, whenever "stockholder" or "shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for a profit, non-stock corporation. Registered corporations have legal personality recognized by local authorities and their shares are owned by shareholders whose liability is generally limited to their investment.

Shareholders do not typically actively manage a corporation; shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity. In most circumstances, a shareholder may also serve as a director or officer of a corporation. Countries with co-determination employ the practice of workers of an enterprise having the right to vote for representatives on the board of directors in a company.

In American English, the word corporation is most often used to describe large business corporations. In British English and in the Commonwealth countries, the term company is more widely used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity. Late in the 19th century, a new form of the company having the limited liability protections of a corporation, and the more favorable tax treatment of either a sole proprietorship or partnership was developed. While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock. In Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH. In the last quarter of the 20th century, this new form of non-corporate organization became available in the United States and other countries, and was known as the limited liability company or LLC. Since the GmbH and LLC forms of organization are technically not corporations (even though they have many of the same features), they will not be discussed in this article.

Inflation

Additional Reading

Big Tech has become too big. Amazon,   Apple,   Facebook, and Google are facing very real threats to their considerable power over our everyday lives from all sides: lawsuits, federal legislation and state legislation, international action, and a public that is increasingly distrustful of these companies and eager for more regulation and enforcement.

Over the last several years, these companies have become bigger and more powerful, and their business decisions have had more impact on our daily lives and society, from the things we buy and where we buy them to the news and opinions we see on social media. What were once considered exciting and innovative products that improved our lives have become, for some, a necessary evil with few competitors. For others, these companies provide a service they use and enjoy. For most, it's probably a mixture of both.

Now we're seeing a bipartisan movement to check these four companies by testing and expanding antitrust laws and the enforcers of them. Lawmakers have introduced a slew of bipartisan bills in the United States House of RepresentativesUnited States Senate.   Republican and Democratic   state attorneys general have signed onto lawsuits accusing them of anti-competitive practices and calling for monetary and structural remedies. Meanwhile, the Federal Trade Commission and the United States Department of Justice's  Antitrust Division - both now led by outspoken Big Tech foes - are set to aggressively enforce antitrust laws: They have Big Tech in their sights. We haven't seen this kind of test of the tech sector since the United States sued Microsoft for antitrust violations in 1998 - a lawsuit that led to the rise of the very companies that are being scrutinized today. Microsoft, meanwhile, has managed to avoid the spotlight this time around despite being more valuable than all of them except Apple (depending on the day).

And while these five Big Tech companies touch all of our lives in some way - sometimes in ways we aren't even aware of, perhaps buried in the infrastructure of the internet that we use all the time - many people don't quite understand what they're being accused of, what antitrust laws are or what they do, and why it's not as simple as "break up Big Tech" or "let the market decide." In this five-part series, we'll break down the arguments for and against these companies, the challenges they face, and how their - and our lives - could change if those efforts succeed.

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LittleSis is proud to announce the release earlier this month of a major collaboration with Color of Change: "Police Foundations: A Corporate-Sponsored Threat to Democracy and Black Lives," a report examining the corporate backing of police foundations in nearly two dozen cities and the harms that police foundations inflict upon Black communities through their support for police forces. The report is featured on the microsite - PoliceFoundations.org - along with other resources, as well as information on how to take action around police foundations where you live.

This collaboration follows up on our widely-covered 2020 research releases "Corporate Backers of the Blue: How Corporations Bankroll U.S. Police Foundations" and "Fossil Fuel Industry Pollutes Black & Brown Communities While Propping Up Racist Policing" (see coverage on The Guardian,   The Hill, and Gizmodo).

The report release comes on the 50th anniversary of the founding of the New York City Police Foundation (NYCPF). Business leaders created the NYCPF in 1971 to privately fund the city's police force. Since then dozens more police foundations have sprung up, most of them during the last two decades. Today, a slew of Wall Street firms and other major corporations fund the NYCPF, and its annual gala is a meeting point for business elites across the city - such as Larry Fink, CEO of BlackRock, the world's biggest asset manager.

What are police foundations?

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On 2021-10-14, 10,000 John Deere workers in Iowa, Illinois, Kansas, Colorado and Georgia went on strike after overwhelmingly rejecting the new contract negotiated between John Deere and their union, the United Auto Workers (UAW). "When you factor in the pandemic, being deemed essential workers, and in our case, having a company turning a record profit, the CEO giving himself a 160 percent raise, and giving a 17 percent dividend raise, we kinda feel like we're left to kick rocks," a striking UAW member and worker at Iowa's Davenport Works (who requested anonymity) recently told Labor Notes.

John Deere's profits and CEO pay are, indeed, worth pointing out. But it also is worth taking a look at where John Deere has spent the bulk of its profits since the last contract with the UAW was signed in 2015. From fiscal year 2016 through the first nine months of fiscal year 2021, John Deere earned more than $16 billion in profits. The company spent roughly $5 billion on dividends and $4.95 billion on share repurchases; nearly $10 billion in total was given to shareholders during the six years of the previous contract.

What does this mean for the workers at John Deere? With the money John Deere gave to shareholders, it could have paid each of its 69,600 worldwide employees an additional $142,000 over the past six years.

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Additional Reading

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