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A company in its modern sense can be asserted to have existed only from the 16th century AD with charters being provided by European governments for international trade, especially by the governments Holland and England. The regulations on navigation routes and territorial monopoly are the first tenets of company law established in this period.
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A corporation is a legally recognized firm with a group of individuals at its helm. The decisions and the deciding individuals or groups involved as stakeholders in an organization are legally bound to be responsible for the activities or the governance of the firm and the effects arising out of the corporation and its activities.
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A legally recognized corporation is said to have a legal presence of its own. The corporation can sue or be sued without the stakeholders being involved in the legal process other than as representatives. This concept will apply to organizations with assets to their name and government entities with rights of consolidated representation.
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The laws formulated within an organization or company is termed as company law in one of the proposed theories for defining this term. The primary purpose for the existence of any organization as stated by British economist Ronald Coase is to avoid the costs of investment capital, knowledge and relationships by formulating regulations reduce wastage and safeguard its stakeholders.