Corporations in United States

Corporate law differs from state to state

Because corporate law differs from state to state, many American corporations are incorporated in a different state than their primary base of operations. Many large corporations are chartered as "Delaware corporations" under the laws of Delaware, which charges no tax on activities outside the state and has courts experienced in corporate law. Corporations set up for privacy or asset protection often charter in Nevada, which does not require disclosure of share ownership. Many other states, particularly smaller states, have harmonized their corporate law around the Model Business Corporation Act, a "guideline" statute drafted by the American Bar Association.

Legally, corporations are accorded some corporate personhood, i.e. Constitutional rights similar to those held by persons. Contrary to accepted legal precedent the U.S. Supreme Court did not rule on this question in the 1886 case Santa Clara County v. Southern Pacific Railroad.

In Santa Clara County v. Southern Pacific Railroad Company (1886), Justice Harlan delivering the opinion of the court said the question regarding whether a corporation is a person within the meaning of the Fourteenth Amendment is an issue upon which the Court “did not deem it necessary to pass.�

In the head notes of the case prepared by Supreme Court reporter J. C. Bancroft Davis, there is the sentence: “The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution … .� Because of illness, Chief Justice Morrison Remick Waite never reviewed the head notes.

Thus, without any deliberation, decision or ruling by the United States Supreme Court, the United States law has proceeded since 1886 with an accepted legal precedent based on the mistake of a clerk who reported something that never occurred.

The oldest corporation in the United States, and the oldest in North America, is the President and Fellows of Harvard College (also known as the Harvard Corporation), chartered in 1650.

Historically, most U.S. states issued charters for fixed lengths of time (for example, a manufacturing corporation might receive a charter good for 40 years), and only by an act of the legislature. Some individuals believed corporations should remain accountable to the government and used these limited charters as a means of forcing companies to do so. Investors, however, noted that it led to unhealthy amounts of political payoffs and graft. Most states now charter unlimited-term corporations for a small fee, and possibly for a yearly tax.

Many countries around the world now have corporate laws based upon state laws from the United States. For example, corporations in Saudi Arabia follow corporate laws copied from New York.

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