According to 2290tax, a corporation is a company type that represents a person or group of people who establish a legal entity by filing articles of incorporation with the state’s secretary of state. There are many advantages to creating a corporate entity. Shareholders purchase common stock to fund the organization and distribute the financial risk. They are entitled to a portion of the profits but are shielded from liabilities. Corporate businesses also have an inherent organizational hierarchy that facilitates management.


Basic Rights and Responsibilities


The basic rights and responsibilities of corporate businesses are defined and regulated by state governments, but most are nationally recognized. These business structures are designed to meet the needs of commerce, and they must be allowed to function as though they have a right to conduct business. They are given the power to take the following actions:


  • Enter into contracts
  • Loan and borrow money
  • Sue and be sued
  • Hire employees
  • Own assets
  • Pay taxes


As a legal entity, a corporate business must also follow the law. They are required to adhere to employment laws and regulations, and they must pay special taxes and fees.


Constitutional Rights


Due to the unique legal definition of these companies, it can be difficult to categorize them when disputes arise. The US Constitution is a document that was written to address the concerns of private citizens and not business entities, but through legal disputes and trials, these companies have managed to win certain constitutional rights for themselves.


  • Due process of property protection
  • Right to a trial by jury
  • Protection against double jeopardy
  • Cannot be subject to unlawful search and seizures
  • Commercial speech is protected by the first amendment




With just the basic legal protection provided to shareholders, unscrupulous individuals have already found ways to take advantage of these systems. While hiding behind the shield of a corporate structure it is often easier to engage in tax evasion, avoid regulatory compliance and defraud shareholders and employees.


Protecting a company from criminal action protects the individuals who should be held responsible for their crimes. Furthermore, commercial speech is more powerful in some circumstances than individual speech. Companies do not have the power to vote in elections, but have been granted the right to influence policy makers by contributing to political campaigns and creating marketing strategies to support or undermine public policies.


A corporate entity is an institution that is created to serve the purposes of collective groups in a market. It therefore stands to reason that they require some form of legal framework and protection. Not everyone agrees that it is appropriate to extend consitutional rights to businesses in the same way that they protect individuals.



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