The idea of a corporate citizen has been around as long as the institution of the currency itself. In fact, corporate citizenship is a concept that has been around since the earliest civilizations developed nations. For instance, the early Chinese state did not have a standing army; instead, they had members who took orders from higher up and were responsible for performing certain duties based upon their position in society. The same concept has developed throughout human history. Nations with stronger economies have typically had stronger corporate cultures than those with weaker economies.
How is corporate status defined today? Corporate status is not solely limited to private companies. Any entity organized as a corporation is considered to be a “successor” in business to its parent corporation. Therefore, all publicly traded corporations are also corporations in many respects. However, there are a few minor differences in the classification of corporations, especially in the United States and Canada, which we will discuss in the remaining sections of this book.
Corporations have sometimes been referred to as partnerships, but in truth, there are no similarities between these two types of organizations. Similarly, although corporations are often thought of as having “ownership rights,” these rights are different in that they are actually “associations.” As a result, corporate law does not require a direct relationship between a corporation and its shareholders (although there may be one with a related corporation).