The Corporations law is not a national clause but is widely different in each state. Federal government has not brought the corporate laws of the state under the commerce clause. Therefore, the state laws, according to the US Constitution’s Tenth Amendment, govern the corporations in each state.
Corporations are legal bodies, which are separate from the people who set up and operate them. They can be profit or non-profit entities. They are intangible, invisible and artificial beings governed by the Corporations law of the state in which they are legally registered. Corporations can obtain, own and sell property and equipment in their name. The law allows these legal entities to enter contracts (leases and franchises) and incur liabilities. In some places, the corporations can represent themselves in the court of law.
Any jurisdiction in the US will allow two of the four major categories of corporations. A corporation can be chartered as Profit or Nonprofit Corporation or it can be chartered as Stock or Non-stock Corporation. The further classifications of the corporations include, closely held or publicly traded bodies, benefit corporations and mutual benefit entities.
All the states in the US have general corporations law, which allows private corporations to be formed without the need to obtain individual charters. There are also self-contained corporation laws in many states governing the incorporation of certain corporations. For instance, there is separate corporation law for non-profit corporations in California and Insurance Code for insurance corporations in Illinois. Most states follow the Model Business Corporation Act set up by the American Bar Association. The corporation law models in the different states in the US are followed by many nations across the world.
Even though a corporation is incorporated in a state, it is not necessary that it be physically located there. Many try to incorporate their corporation in those states where the corporation law is the most favorable to them. Delaware has favorable disclosure laws and corporate tax elements. Hence, many big corporations are registered there. In Nevada, one does not have to disclose share ownership. Therefore, assets or privacy protection corporations are incorporated here.
To create a corporation, one needs to fill and file the necessary documents mandated by the state Corporation law. Generally, banks are the only bodies that are chartered. Other legal entities file their incorporation articles for registration. The incorporated corporation has an artificial personhood.