1.4 The legal characteristics of the modern corporation
In the literature the term ‘the modern corporation’ indicates a quoted public limited company. According to Armour et al. (2009, p. 5), the modern corporation has all five of the following characteristics:
- separate legal personality
- limited liability of its shareholders
- centralised delegated management under a board structure
- transferable shares (in the case of listed companies: freely tradable shares)
- absentee investor ownership.
You will look at these each in turn next.