In examining the Business Corporation we should first be aware that this type of business entity not unlike the LLC and LLP is considered under the law as a juridical person. This means that the Business Corporation can as a legal entity do anything that a human can do. A business corporation can enter into contracts. A business corporation can bring law suits or be the subject of a law suit. In one major sense a business corporation has a capability that humans lack in that one of a corporations major characteristics is that a business corporation has unlimited life. A business corporation will remain active until it is dissolved by an act of its Board of Directors, bankruptcy or other judicial determination.

Another important and unique aspect of the business corporation is that unlike any of the other business formats which we have examined in prior lectures only the business corporation can raise capital (money) for the operation or expansion of the business through the sale of corporate stock, The LLP, LLC, General Partnership or Sole Proprietorship cannot raise business capital in that manner.

Another major advantage of the business corporate format is that the people who run corporate business operations, particularly the corporate officers and directors will not be held personally liable for the corporate business actions of the business corporation.

Organizing (Creating) the Business Corporation

A business corporation is created by a person or persons who intend to incorporate the business entity. The individual or individuals who seek to incorporate a business entity are known as theincorporator(s).

The incorporators will draw up a document to create the business corporation called Certificate of Incorporation. The Certificate of Incorporation contains within itself the basic governance document of the corporation which is called the Articles of Incorporation. The Articles of Incorporation will include the basic information relative to the business corporation. The Articles of Incorporation will include the following information:

1) The corporate business name. It should be noted that a corporation many choose any name it wishes as long as that name is not already in use or has been reserved for future use with the New York State Secretary of State. The law also requires that a corporation's name be sufficiently dissimilar to the name of any existing corporate entity so as not to create public confusion. It should be noted that there have been numerous legal actions that have been precipitated by this requirement.

2) The principal office of the business corporation.

3) The corporate business purpose. It should be noted that the Articles of Incorporation can be quite general as to the corporate purpose and same can be expressed in one or two sentences. It should be further noted that a business corporation may be established and incorporated for any legal purpose, but only for legal; purposes. You may not incorporate a business for the purpose of engaging in money laundering or any other illegal or criminal activity.

4) The Articles of Incorporation will set forth the number and types of directors that will serve on the corporation's Board of Directors. Corporate Directors may serve different terms that can be specified either in the Articles of Incorporation or subsequently adopted corporate by laws. Some corporati9ons have directors who serve 1, 2 or 3 year terms.

5) The initial capitalization of the corporation will also be set in the Articles of Incorporation. The concept her is that the corporate financing will originate from the sale or issuance of corporate stock. The Articles of Incorporation will set forth how the business corporation will initially be capitalized. For example the Articles of Incorporation will state that the corporation will be capitalized (funded) by the issuance of 10,000 shares of common stock. The Articles of Incorporation will also indicate whether the stock to be issues will be Par Value or No Par Value stock. Par Value stock is stock which is issued with a minimum set value. As an example when Facebook stock went public its initial par value was $38 per share. No Par Value stock is stock which has no minimum stated value. In the United States a corporation may issue either Par or no Par Value stock. In much of the rest of the international business community a business corporation is limited to the issuance of only Par Value stock.

Once the Certificate of Incorporation has been completed it must must file with the appropriate filing authority. The filing authority in New York State is the New York Secretary of State. Once this is effected the corporation may commence its business operations. In addition a corporation not unlike an LLP and LLC must give public notice of its formation. This is done by giving public notice as published in a widely read newspaper.

Once all of the above is completed, the incorporators will meet one more time to elect a temporary Board of Directors. The temporary Board of Directors will meet initially to begin business operations pending the election of a permanent Board of directors. The first order of business of the temporary Board of Directors will b e to set a shareholders meeting for the purpose of electing a permanent Board of Directors and for the adoption of corporate by laws.

The corporate hierarchy and its various functions will be discussed in the next lecture.

In view of the many advantages that the law affords to business corporations and similar entities what if any additional responsibilities should these business entities have to the public.