t is a matter of
business prudence to have its purpose and powers defined: (a) to enable it
to secure subscribers to its stock, as no one would like to risk his money
blindly; and (b) because thus only can the directors be held to
accountability. Second, from the standpoint of the public, for whom the
legislature acts, the defining is necessary in order that corporations may
be controlled and dangerous combinations prevented.

In this connection it may be noted that corporations are granted some
privileges not possessed by individuals. For instance, private property
such as land may be taken, even against the wishes of the owner, to permit
the building of a railroad. This can be done, however, only on the ground
of public good, and by giving the owner just compensation.

Responsibility.--A corporation, like any other person is responsible for
any contracts that it makes, within its charter. It necessarily acts
entirely through agents, hence the law of agency has an important bearing
upon all contracts with a corporation.

Debts incurred lie against the corporation, not as a rule against the
stockholders individually. Sometimes stockholders are by the charter made
liable to limited extent, say to an amount equal to the par value of their
stock.

Dissolution.--Some companies are incorporated so that they may last
forever. Others are incorporated for a specified time. The latter expire
by limitation or by becoming insolvent. A corporation of either kind may
secure dissolution by voluntarily surrendering its charter. And sometimes
the legislature reserves in the charter the right to dissolve the company
under certain conditions.

The affairs of a corporation are usually closed up by a "receiver," who
collects the bills, disposes of the property, pays the indebtedness as far
as he can, and distributes the residue among the stockholders.

COMPARISON OF PARTNERSHIP WITH CORPORATION.

POINTS OF PARTNERSHIP. CORPORATION.
COMPARISON.

1. Status. A collection of natural A fictitious person.
persons.

2. Formation. By agreement. By legislative
enactment.

3. Powers. Those of natural persons. Only those conferred
by law.

4. Debts. All partners liable for all Stockholders not
debts. usually