A traditional corporation is a centralised legal entity owned by shareholders and directed by a board, granting limited liability and a hierarchical management structure under company law. Decision-making authority and capital are concentrated, with accountability mediated through fiduciary duties and regulatory oversight. It is the conventional organisational form against which decentralised autonomous organisations are contrasted.
Overview
- Concentrates authority in management hierarchies and a board of directors.
- Grants limited liability and tradable equity to owners.
- Differs from on-chain organisations in custody, transparency and execution.
Key aspects
- Shareholder ownership and board direction define control.
- Limited liability separates personal and corporate risk.
- Fiduciary duties bind directors to act in owners’ interests.
- Regulatory oversight enforces accountability and reporting.
Applications
- Conventional commerce and capital formation.
- Reference model for comparing decentralised governance.
- Hybrid structures wrapping DAOs in legal entities.