In the United States, corporations are the most prevailing type of business organization. A corporation is an artificial person created by law, with most of legal rights of a real person, including the rights to start and operate business, to own or dispose of property, to borrow money, to sue or be sued, and to enter into binding contracts. There are two kinds of corporations: The public corporations which are created by the government to succeed political and governmental aims and the private corporations which are formed by private persons for private benefitsÆ'
•. The proprietors are called shareholders and they have stock certificates. These business organizations are also classified as profit or nonprofit, publicly or closely held, professional, domestic, foreign, alien and S corporations. The classification is depending on their locations, purpose or ownersÆ' £. .
A corporation is a creation of the state because its life is depending on state lawsÆ' ¤. It does not exist any general federal corporation law that governs the structure and the function of private corporations, but there are several federal laws, such as securities laws, labor laws, antitrust laws, consumer protection laws, environmental protection laws and bankruptcy laws. It is a separate legal existence that if it infringes or neglect the law it can be held criminally and civilly responsible. The Committee on Corporate Laws of the American Bar Association first drafted the Model Business Corporation Act(MBCA) in 1950 that was intended to provide a uniform law for regulations of corporations. In 1984, the committee completely revised the MBCA and issued the Revised Model Business Corporation Ac(RMBCA),that arranged the provisions of the act more logically, revised the language to be more consistent and made substantial changes in the provisions. Many states have adopted all or part of the RMBCA.