Advantages and Disadvantages

Corporations date back to the Middle Ages, a period in European history dating from about the 5th century to about the 15th century. The earliest corporations were used to organize universities, monasteries, and guilds.

In the 16th and 17th centuries, governments used corporations to organize voyages of exploration and discovery. In the early 17th century, the English crown granted charters to joint-stock corporations giving them authority to govern and to engage in trade in the American colonies. After the United States gained its independence in 1776, states were given the power to grant corporate charters.

In 1811 New York became the first state to pass a law outlining the procedure for becoming a corporation, and the other states soon followed. The corporation was well suited to meet the demands of the Industrial Revolution, which generated a tremendous increase in the number of business opportunities that required large amounts of financial capital. By the 20th century, the corporation was the dominant type of business organization throughout the world.