I don’t think the corporate personhood should be abandoned despite the issues related to it that we have studied this term. One reason is the fact that the legal concept of corporate personhood is now so pervasive globally that we would be doing a disservice to our own corporations by limiting their rights to a set list in a statute. In a corporate world ruled by transnational corporations it is helpful to have at least a basic common concept of personhood across domestic legal systems. As the corporate landscape continues to evolve and change, it is unclear what rights, powers and privileges our corporations might be in need of in order to be competitive on a global scale. By having the personhood concept, it will allow the law to change through legal decisions in response to the changes taking place in the corporate world.
Another reason is that if we make a list of rights and privileges, without specifying responsibilities and liabilities, we haven’t solved many of the issues exhibited by the corporate person. Perhaps if in addition to the list of rights we would include a regime for attaching liability to people in control of the company it would make more sense. Otherwise we would still be left with the issue of finding a directing mind.
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Much like the question in the exam, I think the helpfulness of a provision directly related to “piercing the corporate veil” would perhaps be valuable. I agree with you that corporate personhood should not be abandoned, but I do also see the issues that without the ability to find the “directing minds” to be made responsible for things, we are left in a sort of grey area as to what can be done when these “persons” do things against the law.
Just to continue the discussion on the above comment and the original post, I agree that separate corporate identity is useful but should be kept in check by methods, such as piercing the corporate veil. But the question we have to consider is: what is the main objective of having a separate corporate identity? Through what we have learned over the semester, I believe that separate corporate identity was not created so that corporations can “game” the system. It isn’t a medium for the corporations to pursue their desires through illegal means. This is covered by the “akin to fraud” notion in Transamerica Life.
I do believe that separate corporate identity does its job in making things more simple and streamlined (imagine having contracts with every single directors every time you want to do business).
Also, I kind of think the grey area is necessary. As we have seen, there are innovative approaches to using the corporation’s separate identity. Codification of piercing is nice, but it should not be rigid. We need the common law to keep up with the innovative approaches that are up and coming.
Coming from a social sciences background and a previous “career” as a ski bum, I had very little knowledge of business organizations, inside and outside of a legal context. My only encounters with the notion of corporate personhood were from recent SCOTUS decisions, such as Hobby Lobby and Citizens United. As Democrat by nature and nurture I was vehemently against corporate personhood as I understood its relevance only to giving corporations “freedom of expression” and “freedom of religion.” However, since taking this course, and actually learning about the doctrine of separate personhood, I agree with you Floriana, that it should not be abandoned, for many of the reasons you raised and more. I also agree with Jaehyuk, that separate corporate personhood was not created so that corporations could “game” the system, and my hope is that in thinking what “gaming” the system entails, we can include (or at least our friends in the US can) a consideration of what it means to give corporations full fledged human rights.
I further agree with Jaehyuk in the necessity of the “grey area.” If the shmorgishborg of case law we have encountered this semester has revealed, instances of piercing the corporate veil are random AF, and because piercing the corporate veil is an equitable remedy, the courts need a fair amount of flexibility in their discretion in whether or not to pierce that veil.
Hi Floriana; Hi Erin,
Floriana. You’re so right. It would make very little sense to abandon corporate personhood. Regardless of whether it is codified in statute or crystallized in the common law the point, like you raised, is that these underlying laws are essentially customary. It is an inherent quality of corporate law that goes beyond just the company itself.
Erin; first off, LOL @ “random AF.” But it makes perfect sense. I think that the case law goes that corporate personhood wasn’t created to game the system but instead, the system is a game in and of itself…like Westworld.
In response to the comment by erin kotz:
I, too, came into this course not knowing much about corporate personhood.
Familiar with the basic facts, issues, and reasoning in Citizens United, I believed that since the concept of corporate personhood seems to have been abused to achieve ridiculous and unfair results in certain circumstances, it should be abolished. While I still think that the controversial decision in Citizens United has troublesome implications, this course has made clear that the concept of corporate personhood makes a great deal of economic sense. Allowing for the creation of entities that are distinct from shareholders and enjoy their own legal rights is very beneficial. As we have learned, limited liability protects shareholders personal assets which in turn encourages investment, promotes entrepreneurship, and inspires the risk-taking required for innovation and growth.
Still, we must keep in mind that corporations are legal persons but not natural persons. They are not human beings. It makes economic sense that they be given certain rights of legal personhood required to fulfil the basic purpose for which they were created. Corporate personhood shouldn’t be abolished, but I argue that corporations shouldn’t be extended all rights that human beings enjoy, particularly freedom of speech or freedom of religion — issues recently addressed by the United States Supreme Court in Citizens United (freedom of speech) and Hobby Lobby (freedom of religion).