What is the definition of a corporation?

The definition of a corporation as an artificial and intangible entity created under state law is correct because it captures the essence of what a corporation is in the legal context. A corporation is recognized as a separate legal entity from its owners (shareholders), which means it can own property, enter into contracts, and be subjected to liabilities independent of its shareholders. This characteristic of being "artificial" denotes that a corporation is not a natural person but rather a construct created by law that facilitates business operations.

Additionally, the term "intangible" reflects the idea that a corporation does not have a physical presence in the same way that individual people do; instead, it exists as a legal framework through which business can be conducted. The fact that corporations are created under state law implies that their formation and regulation are governed by statutes and regulations specific to each state, further emphasizing their legally defined nature.

This definition aligns with the principles of corporate law, emphasizing the separation of legal identity between the corporation and its shareholders, which is fundamental to how corporations are treated in business dealings and liability management.