corporation

noun cor·po·ra·tion \ ˌkȯr-pə-ˈrā-shən \

Updated on: 24 Apr 2018

1 a : a group of merchants or traders united in a trade guild (see guild 1)

b : the municipal authorities of a town or city

2 : a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession

3 : an association of employers and employees in a basic industry or of members of a profession organized as an organ of political representation in a corporative state

4 : potbelly 1

See corporation defined for English-language learners

See corporation defined for kids

Examples of corporation in a Sentence

He works as a consultant for several large corporations.
a substantial corporation that showed that he was a sucker for all-you-can-eat buffets

Recent Examples of corporation from the Web

The tax bill that Ryan helped pass last year delivered substantial cuts for both small and large types of corporations in the state such as manufacturers — a key group within WMC.

— jason stein, Milwaukee Journal Sentinel, "Paul Ryan says Congress must protect people's privacy rights on social media but cautioned about going too far," 20 Apr. 2018
In this case, two black men were waiting for a friend, but not making a purchase, in one of the most overtly progressive corporations in the nation.

— patrik jonsson, The Christian Science Monitor, "Even at Starbucks? A conversation grows about hidden racial bias.," 18 Apr. 2018
Its major provisions would lower the income tax rate for most people and corporations, put the 6 percent sales tax on 17 services and raise the cigarette tax by 50 cents per pack to $1.10.

— tom loftus, The Courier-Journal, "Kentucky tax reform bill inadvertently cut credit used by Toyota and other manufacturers," 12 Apr. 2018
But agencies are also allowed to sell tax-exempt bonds on behalf of corporations for projects like waste disposal facilities, power plants or airport terminals, a far-more riskier niche that’s previously been affected by bankruptcies.

— martin z braun, Bloomberg.com, "FirstEnergy Unit's Collapse Casts Pall Over Nuveen Muni Holdings," 10 Apr. 2018
The move of these tech corporations into the healthcare sector is likely to impact the entire healthcare industry.

— mara smith, Philly.com, "Paging Doctor Amazon: The impact of tech's assault on healthcare," 6 Apr. 2018
Not surprisingly, investors are comparing the growth of this wider ecosystem to the impact of big-tech corporations like Google, Apple, Amazon and eBay (all of which have their own vested interests in music, through either streaming or ticketing).

— cherie hu, Billboard, "As Streaming Fuels Music Industry's Growth, More VC & Finance Veterans Move In," 4 Apr. 2018
The city’s glass high-rises contain dozens of multinational corporations, including Pepsi, Google, and Microsoft.

— rachel aviv, The New Yorker, "At Uber, a New C.E.O. Shifts Gears," 30 Mar. 2018
An evil corporation, IOI, has even gotten in on the action with an army of mercenaries, hoping to win control of Oasis and of course, sell advertising.

— katie walsh, idahostatesman, "‘Ready Player One’ can’t be a winner without stakes | Idaho Statesman," 29 Mar. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'corporation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of corporation

see corporate

NEW! Time Traveler

First Known Use: 15th century

in the meaning defined at sense 1b

See Words from the same year

Other Business Terms

amortize, caveat emptor, clearinghouse, divest, due diligence, emolument, green-collar, marque, overhead, perquisite

Financial Definition of CORPORATION

corporation

noun

What It Is

A corporation is one of many ways to formally organize a business. Structuring a business as a corporation has a number of important legal requirements and consequences that impact investors.

How It Works

A corporation is also sometimes referred to as a "C Corp." The "C" refers to the section of the IRS code that governs corporate taxes. Corporations have several distinguishing characteristics:

1. A corporation is owned by shareholders, and their ownership is represented by shares of stock.
2. A corporation has a board of directors, which is a group of people elected by the shareholders to oversee the corporation's management. The board of directors is elected to make decisions that are in the best interest of the shareholders.
3. A corporation has an unlimited life; that is, corporations don't die or expire unless a) the shareholders decide to intentionally dissolve the corporation or b) a corporation is unable to pay its debts and is forced into bankruptcy.
4. Shareholders have limited liability. That is, the liabilities of the corporation do not extend to the shareholders. If the corporation goes bankrupt or defaults on a loan, lenders cannot repossess shareholders' personal assets or try to force shareholders to repay the company's debts.
5. Corporations pay taxes on their income, even if they distribute some of that income directly to the shareholders via dividend payments. This leads to the controversial "double taxation."
6. Corporations are legal entities that exist separate and apart from their shareholders. In fact, they are usually afforded the legal rights of an individual person. That is, they can own assets, borrow money and sue or be sued.

Why It Matters

It's important to understand the characteristics of corporations because if you have money in the stock market, you are a shareholder and part owner of the corporations whose stock you own.

Corporations are the most popular form of business structure in the U.S. because of the limited liability protection. If the corporation can't pay back its loans, your shares will lose value (perhaps 100% of their value), but you as a shareholder are not responsible for paying back the debts. A shareholder cannot lose more than 100% of his or her investment.

If the corporation makes a profit, your shares in that company will become more valuable because as a shareholder, you're entitled to your portion of the net income. In fact, one of the main goals of a corporation's employees is to maximize shareholder value; that is, to work on behalf of the owners in order to enrich them as much as possible.

The corporate structure is not appropriate for every business. Corporations are highly governed, regulated and taxed when compared to other business forms (sole proprietorships or partnerships). This makes them more expensive to operate and conduct business. One of the largest complaints about the corporate structure is that profits are taxed twice: the corporation must pay income taxes and shareholders must pay income taxes on that same income if they receive a dividend payout (double taxation).

Source: Investing Answers

CORPORATION Defined for English Language Learners

corporation

noun

: a large business or organization that under the law has the rights and duties of an individual and follows a specific purpose

CORPORATION Defined for Kids

corporation

noun cor·po·ra·tion \ ˌkȯr-pə-ˈrā-shən \

: a business or organization authorized by law to carry on an activity with the rights and duties of a single person

Word Root of corporation

The Latin word corpus, meaning “body,” and its form corporis give us the root corp or corpor. Words from the Latin corpus have something to do with the body. Corporal is an adjective describing something that has to do with a person's or animal's body. A corporal is a military officer who leads a body of soldiers. A corporation is a body, or group, of people who run a company. A corpse is a dead body.

Law Dictionary

corporation

noun cor·po·ra·tion \ ˌkȯr-pə-ˈrā-shən \

: an invisible, intangible, artificial creation of the law existing as a voluntary chartered association of individuals that has most of the rights and duties of natural persons but with perpetual existence and limited liability — see also pierce — compare association, partnership, sole proprietorship

— benefit corporation

: a for-profit corporation whose purpose is to provide a benefit to society (such as improving the environment or promoting good health) in addition to making a profit for shareholders — called also B corporation, public benefit corporation

— C corporation

: a corporation that pays taxes as a corporate entity — compare S corporation in this entry

Note: A corporation that does not choose to be an S corporation under the Internal Revenue Code is a C corporation.

— close corporation \ˈklōs-\

: a corporation whose shares are held by a small number of individuals (as management) and not publicly traded; specifically : small business corporation in this entry — called also closely held corporation ; compare public corporation in this entry

— foreign corporation

: a corporation organized under the laws of a state or government other than that in which it is doing business

— government corporation

: public corporation in this entry

— moneyed corporation

: a corporation (as a bank) authorized to engage in the investment, exchange, or lending of moneyed capital

— municipal corporation

: a political unit created or otherwise given corporate status (as by a charter) by a superior governing authority (as a state) and endowed with powers of local self-government (as eminent domain); broadly : a public corporation (as a utility) created to act as an agency of administration and local self-government

Note: As a result of its incorporation, a municipal corporation has the capacity to sue and be sued. Citizens as well as officials are usually considered part of a municipal corporation.

— professional corporation

: a corporation organized by one or more licensed individuals (as a doctor or lawyer) to provide professional services and obtain tax advantages

— public corporation

1 : a government-owned corporation (as a utility or railroad) engaged in a profit-making enterprise that may require the exercise of powers unique to government (as eminent domain) — called also government corporation, publicly held corporation

2 : a business corporation whose stocks are publicly traded — called also publicly held corporation; compare close corporation in this entry

— S corporation

: a small business corporation that is treated for federal tax purposes as a partnership — called also subchapter S corporation; compare c corporation in this entry

— shell corporation

1 : a corporation that exists as a legal entity without independent assets or operations as an instrument by which another company or corporation can carry out dealings usually unrelated to its primary business

2 : a corporation formed for purposes of tax evasion or acquisition or merger rather than for a legitimate business purpose

— small business corporation

: a corporation described in section 1361 of the Internal Revenue Code that has 35 shareholders or less and only one class of stock and that may if eligible elect to be an S corporation and taxed accordingly

— subchapter S corporation

: s corporation in this entry