Also known as: private corporations · privately held corporation · private corp
Written by attorneys · grounded in primary & secondary sources — see below
A legal entity organized under state law that possesses rights and liabilities separate from its shareholders and that pursues private business or charitable purposes rather than governmental functions.
Pacific Bank receives a notice of deposition that lists topics about its loan approval practices. The bank designates its compliance officer to testify on those topics after conferring with the serving party. The officer appears and answers questions based on information known or reasonably available to the bank.
Phoebe Park enrolls her son at a private academy organized as a corporation under state law. The academy sets its own curriculum and tuition without state funding. Parents later challenge a state statute that would force closure of the academy.
Select any source to read its text and confirm it supports the definition.
Pioneer Energy owns track and stations as a private corporation. The city initiates eminent domain proceedings to acquire a strip of land for a street widening project. The corporation demands compensation measured by the fair market value of the taken property.
Phoenix Technologies compiles a proprietary earnings forecast for internal use. An employee leaks the forecast to a competitor. The corporation sues to enjoin further disclosure and to recover damages for the loss of exclusive use.
Pinnacle Holdings shareholders file suit on behalf of the corporation alleging that directors wasted corporate assets. The complaint demands that any recovery be paid to the corporation rather than to the individual plaintiffs.
Perry Pratt learns of an impending acquisition while working at a target corporation. He purchases shares before the announcement and sells after the price rises. The corporation's shareholders later bring claims based on the misuse of nonpublic information.
A party may name a private corporation as the deponent and must describe the matters for examination with reasonable particularity. The corporation must then designate one or more officers or other persons to testify on its behalf about information known or reasonably available to the organization.
A private corporation holds its property in a proprietary capacity similar to a natural person. The Fourteenth Amendment therefore requires just compensation when the state takes that property for public use.
A private corporation becomes a state actor only when its conduct is so intertwined with government that it constitutes state action. Mere regulation or receipt of a state-granted monopoly does not convert the corporation into a government actor.
Corporate statutes prohibit indemnification for liability arising from an intentional violation of criminal law even when the bylaws contain broad indemnification language. A convicted officer therefore cannot compel the corporation to pay criminal fines or related penalties.
…a court of equity will protect through the injunctive process or other appropriate remedy.” 3 W. Fletcher, Cyclopedia of Law of Private Corporations §857.1, p. 260 (rev. ed. 1986) (footnote omitted). The Journal had a property right in keeping confidential and making exclusive use, prior to publication, of the schedule and contents of…