Corporation – definition and meaning

A Corporation is a company. In most countries, it means a large company, often with subsidiaries. In the United Kingdom, however, it can also be a state company. For example, the BBC (British Broadcasting Corporation) belongs to the state. Legally, corporations are separate entities from their owners.

The term does not always have the same meaning as a company. All corporations are companies. However, not all companies are corporations.

For example, let’s suppose you own a small company that repairs lawnmowers, and you employ eight workers. You cannot say that you have a corporation. You can, however, say you have a company.

Large entities

Corporations are large entities that often do several different businesses. Many corporations have some subsidiary companies.

Corporations are firms in the sense that they are in business to make a profit.

The definition of a corporation can vary from country to country. However, most people globally would agree that a company can be any business.

In fact, in some countries, people even class partnerships as companies. Corporations, on the other hand, mostly have a board of directors whose members are chosen by voting shareholders.

Corporation - image with list of features
Corporations have been around for thousands of years.

Corporation vs. Company in the US and UK

The website translegal.com explains that the meanings of corporation and company in the US and UK differ slightly.

In the US, a corporation is a company whose shareholders are only liable for the shares they own. If it goes bankrupt, they only lose the value of their shares. However, creditors cannot go after their private assets.

In the UK, corporations are large companies. However, in British English, the term may also refer to a state company.

The Cambridge Dictionary has the following definition of corporation:

“1. A large company or group of companies that is controlled together as a single organization. 2. An organization, esp. a business, that has a legally separate existence from the people who run it:”

Types of corporations

There are several types of corporations. However, in most countries there are two basic types:

1. For-profit companies.

2. Not-for-profit companies.

Stock corporations are companies that issue stocks. The term ‘stocks’ means the same as ‘shares.’ The ownership of such corporations is through shares.

We refer to the owners of shares as ‘shareholders.’ We also use the term ‘stockholders’ with the same meaning ‘shareholders.’

Corporations have rights

Corporations are not people. However, the law sees them as legal entities just like humans. In fact, they have many of the same rights and responsibilities that you and I have.

Corporations can be responsible for human rights violations. They can also exercise human rights issues against the state and real individuals.

There are many ways to dissolve corporations. It can be through voluntary action or statutory operation. Stockholders can also dissolve corporations.

Insolvency may be the result of corporate failure. For example, creditors may force the liquidation and dissolution of the company under court order.

Companies corporations
Many famous companies have the word ‘corporation’ or ‘corp.’ in their name.

Etymologists say that the word ‘corporation’ originates from the Latin corpus, which means ‘a body’ or ‘a body of people.’

Compound phrases with the word “corporation”

A compound phrase is a two-, three-, four-word term. Let’s look at some compound phrases containing the word “corporation”:

  • Multinational Corporation

A company that operates in multiple countries.
For example: “She works for a multinational corporation that has offices in over 30 countries.”

  • Public Corporation

A company whose shares are traded publicly on the stock exchange.
For example: “After its IPO, the business became a public corporation with thousands of shareholders.”

  • Holding Corporation

A company created to own shares in other companies.
For example: “The holding corporation controls several smaller companies across various industries.”

  • Private Corporation

A business entity that does not offer its stock to the general public.
For example: “Unlike its competitors, it remains a private corporation with its original family owners.”

  • Parent Corporation

A company that owns enough voting stock in another firm to control its management.
For example: “The parent corporation set strategic direction for all of its subsidiaries.”

  • Nonprofit Corporation

An organization established for purposes other than making a profit.
For example: “The nonprofit corporation was granted tax-exempt status due to its educational mission.”

2 Videos

The educational videos featured on our partner YouTube channel, Marketing Business Network, offer explain the meanings of ‘Corporation’ and ‘Corporate Tax,’ utilizing easy-to-understand language and real-world illustrations.

  • What is a Corporation?

  • What is Corporate Tax?