Corporations are one of the prerequisites for human civilization. They are the medium for ideas
An incorporated entity –usually an organization, a group of people or a company– authorized by a nation 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. (via Wikipedia)
Private versus public corporations¶
There are two big types of corporations.
- private corporation¶
A corporation whose mission is to protect and grow the capital of its owners and to increase their revenue.
- public corporation¶
A corporation whose mission is described and recognized as being of public interest.
See Public corporations below.
The difference between private and public corporations is their reason of being. The ultimate mission of a private corporation is to make financial profit to be shared among their owners, the shareholders. The ultimate mission of a public corporation is described and recognized as being of public interest, and any profit that may result from their activity is being reinvested into the corporation’s mission.
As an example, let’s look at the mission statements of three big corporations:
“Our mission is to organize the world’s information and make it universally accessible and useful.” Google
“Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. We strive to create local opportunity, growth, and impact in every country around the world.” (via geekwire.com)
“The mission of the Wikimedia Foundation is to empower and engage people around the world to collect and develop educational content under a free license or in the public domain, and to disseminate it effectively and globally.” (wikimediafoundation.org)
These three mission statements sound similar in nature. They all declare to fight for a noble cause. What they don’t say –because it is obvious– is their ultimate mission, their fundamental motivation and reason of being. Google and Microsoft are private corporations, which means that their ultimate mission is to make financial profit to be shared among their owners, the shareholders. The Wikimedia Foundation, by contrast, is a public corporation. Any financial profit that may result from their activity is being reinvested into the corporation’s mission.
Corporations aren’t humans¶
All corporations are of same nature: they are intangible, immaterial. They exist only in our minds, they are legal fictions, ideas, created by a group of humans by giving them a name and allowing them to exist as legal persons.
- legal person¶
An officially recognized corporation that has certain privileges and obligations similar to those of natural persons. For example they can enter into contracts, they can sue others, or can be sued by others.
- juridical person¶
The word legal person reminds us that every corporation has goals, intentions and motivations. As such they are similar to real humans (sometimes called “natural person”).
Very small corporations, e.g. a choir or a local scout group may not have been registered as a legal person, and their mission statement might be less formal. They might eventually regulate their existence and become a legal person.
See also Stop mixing up corporations and humans.
The mission of a public corporation is not necessary “universal”. Not everybody needs to agree that their mission is “good”. It’s enough that their mission is fully known to the public and that it is not to increase the wealth of its owners. A public corporation does not have any owners.
- national government¶
A public corporation responsible for the survival and welfare of a given nation.
- supernational body¶
A public corporation responsible for collaboration between a group of nations.
Euler diagram of supranational European Bodies. (Wikipedia)
A public corporation that was created using the capital of a founder, who formulated the mission statement and did the administrative work of getting it legally registered.