CORPORATJON
for their own advantage,--0r even if organized for Su bsidia,-Y and parent. Subsidiary
the benefit of the public generally, as in the case of _a
free public hospital or other charitable institut1on,-1t
is none the less a private corporation if it does not
possess governmental powers or functions. The uses
may in a sense be called "public," but the corporation
is "private," as much so as if the franchises were
vested in a single person. Dartmouth College v.
Woodward, 17 U.S. (4 Wheat.) 562, 4 L.Ed. 629. It is
to _be observed, however, that those corporations
which serve the public or contribute to the comfort
and convenience of the general public, though owned
and managed by private interests, are now denomi-
nated "public-service corporations." See infra. An-
other distinction between public and private corpora-
tions is that the former are not voluntary associations
(as the latter are) and that there is no contractual
relation between the government and a public corpo-
ration or between the individuals who compose it.
While the above are strict distinctions between
"public" and "private" corporations, in common us-
age the term "public" corporation is frequently used
to distinguish a business corporation whose shares
are traded to and among the general public as op-
posed to a "private" (or "close" corporation) whose
shares are not so traded.
Ecclesiastical and lay. In the English law, all corpo-
rations private are divided into ecclesiastical and lay,
the former being such corporations as are composed
exclusively of ecclesiastics organized for spiritual
purposes, or for administering property held for reli-
gious uses, such as bishops and certain other digni-
taries of the church and (formerly) abbeys and mon-
asteries. 1 Bl.Comm. 470. Lay corporations are
those composed of laymen, and existing for secular or
business purposes. This distinction is not recognized
in American law. Corporations formed for the pur-
pose of maintaining or propagating religion or of
supporting public religious services, according to the
rights of particular denominations, and incidentally
owning and administering real and personal property
for religious uses, are called "religious corporations,"
as distinguished from business corporations; but they
are "lay" corporations, and not "ecclesiastical" in the
sense of the English law.
Aggregate and sole. A corporation sole is one con-
sisting of one person only, and his successors in some
particular station, who are incorporated by law in
order to give them some legal capacities and advan-
tages, particularly that of perpetuity, which in their
natural persons they could not have had. In this
sense, the sovereign in England is a sole corporation,
so is a bishop, so are some deans distinct from their
several chapters, · and so is every parson and vicar.
A corporation aggregate is one composed of a num-
ber of individuals vested with corporate powers; and
a "corporation," as the word is used in general popu-
lar and legal speech, and as defined at the head of
this title, means a "corporation aggregate."
Domestic and foreign. With reference to the laws
and the courts of any given state, a "domestic" cor-
poration is one created by, or organized under, the
Jaws of that state; a "foreign" corporation is one
created by or under the laws of another state, govern-
ment, or country.
Jog
r ( II corporat·Ion JS.
in which another corpora 1?n ca ed parent co one
tion) owns at least a maJonty of the shares, an]ora.
has control. thus
Other Compound and Descriptive Terms
Business corporation. One formed for the purp
transacting business in the widest sense of that ose of
including not only trade and commerce, but ma terrn,
· · b an k'mg, insurance,
·
turing, mmmg, transportnufac
. ·
and practically every form of commercial or indation,
st
al activity where the purpose of the organiza/ r.1-
pecuniary profit; contrasted with religious c;on 1s
ble educational, and other like organizatio~s ;~_ta.
are' sometimes grouped in the statutory law of'a tich
•
under the genera 1 d es1gna t·ion o f .. corporationss ate
for profit." not
Brother-sister corporation. See that title.
Civil corporati?n. In the la~ of L?uisiana, the term
"civil" as applied to corporations, 1s used in a diff
ent sense, being contrasted with "religious." c·er-
. IVI1
corporations are t h ose w h'!c h re Iate to temporal Po-
lice; such are the corporations of the cities, the com-
panies for the adva~cement of comm~rce and agricul-
ture, literary soc1elles, colleges or uruversities found-
ed for the instruction of youth, and the like. Reli-
gious corporations_ are those whose establishment
relates only to rehg10n; such are the congregations of
the different religious persuasions. Civ.Code La. art.
431.
Close corporation. A corporation whose shares, or at
least voting shares, are held by a single shareholder
or closely-knit ~ro_up of shareholders. Generally,
there are no public investors and its shareholders are
active in the conduct of the business. A close corpo-
ration is one which fills its own vacancies or in which
power of voting is held through manipulation under
fixed and virtually perpetual proxies. Brooks v. Will-
cuts, C.C.A.Minn., 78 F.2d 270, 273. A corporation,
the stock ownership of which is not widely dispersed.
Instead, a few shareholders are in control of corpo-
rate policy and are in a position to benefit personally
from such policy.
Closely held corporation. See Close corporation, su-
pra.
Corporation de facto. One existing under color of
law and in pursuance of an effort made in good faith
to organize a corporation under the statute; an asso•
elation of men claiming to be a legally incorporated
company, and exercising the powers and functions of
a corporation, but without actual lawful authority to
do so. Its elements are a Jaw or charter authorizing
such a corporation, an attempt in good faith to com·
ply with law authorizing its incorporation, and unin-
tentional omission of essential requirements of the
law or charter, and exercise in good faith of corporate
functions under the law or charter. A corporauon
which has been defectively formed but which is not
subject to collateral attack.
Corporation de jure. That which exists by reason of
full compliance by incorporators with requirements
of an existing law permitting organization of such
corporation.