The Corporation As A Legal Entity
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I- Introduction
A. What is a corporation?
A corporation is a juristic person with a separated legal persona, or individual, from its members. (Corporation, Wikipedia) The law allows a group of natural persons, human beings, to act as a legal person for limited purposes such as lawsuits, property ownerships and contracts. (Juristic person, Wikipedia) A corporation has legal rights and duties just like a natural person. Even though a corporation is considered an individual there are some limitations. (Juristic person, Wikipedia) Corporations cannot marry, vote or hold public office. In the past governments would give corporate charters or licenses so that corporations could exist. (Juristic person, Wikipedia) These corporate charters were limited to a set number of years and could be renewed by a legislature or the corporation in question would simply dissolve at the expiration date. (Our Hidden History of Corporations in the United States) The government closely regulated corporations; the corporation charter could be rapidly revoked for violating the law. Also governments granted shareholders the right to remove directors at will. (Our Hidden History of Corporations in the United States) Now corporations are registered with the state, province, or national government and become regulated by the laws enacted by that government. (Corporation, Wikipedia) Corporations have evolved since the American Revolution to what they are today.
B. The 14th Amendment
After the American Civil War, three Amendments, 13th, 14th, and 15th, were passed as part of the Reconstruction Program. (14th Amendment to the US Constitution: Civil Rights) The 13th Amendment of the US constitution states the following: “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdictionÐ Congress shall have power to enforce this article by appropriate legislation.” (13th Amendment to the US Constitution) Slaves, especially African Americans, were set free by the 13th Amendment and granted citizenship when the 14th Amendment was passed, it stated the following:
“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” (14th Amendment to the US Constitution)
The 15th Amendment pronounces the following: “The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.” (15th Amendment to the US Constitution) This last amendment granted African Americans and other discriminated groups the right to vote. The purpose of the Reconstruction Amendments was to guarantee equal civil and legal rights to slaves. (14th Amendment to the US Constitution: Civil Rights) In 1886, the Supreme Court Case Santa Clara County v. Southern Pacific Railroad awarded corporations the same rights as living persons under the 14th Amendment of the constitution. It was stated that “The defendant Corporations are persons within the intent of the clause in section one of the Fourteenth Amendment of the Constitution of the United States, which forbids a State to deny any person within its jurisdiction the equal protection of the laws.” (US Supreme Court) After the year 1886, there is a dramatic change in how corporations operate.
II- The Corporation before the 14th amendment
First of all, is necessary to make clear that many of the examples and theories provided in this section are related to the situation of Corporations before the 14th Amendment in the United States of America.
At the beginning corporation were formed by governments to accomplish tasks, which were too risky or expensive for individuals to do for themselves (Corporation, Wikipedia). Therefore corporate charters were closely regulated by governments (Idem). Forming a corporation usually required an act of legislature (Idem); also investors had to be given an equal say in corporate governance (Idem), and it was required to comply with the purposes expressed in their charters (Idem). Overall corporations focused primarily on protection of public interest. (Idem)
Mission of a Corporation
Robbins described corporations as a “social invention of the state” (Robbins, p.98). Robbins also cites Anup Shah article, The Rise of Corporations, and quotes: “a state grants a corporate charter permitting private financial resources to be used for public purposes. The initial creation of private finance and merchants etc was to aid in the expansion of a state to which it belonged and it served to expand colonial and imperial interests, as well as to help in war efforts between empires.”
What Makes a Corporation
A corporation was made by the investment of certain amount of money by a group of enterprises in the form of shareholders with a common purpose.
How Corporations Operate
Corporations operated in different ways depending on what government they belonged to and what their purpose was (Our Hidden History of Corporations in the United States). According to the article “Our Hidden History of Corporations in the United States” by ReclaimDemocracy.org, in order to see profits the owners of the corporation dedicated more time in pressing the states government over the charter they applied. Some actions that were undertaken are:
Control over labor, resources, community rights, and political sovereignty (Our Hidden History of Corporations in the United States).
Abusing of charters to become conglomerates and trusts (Idem).
Conversion of the nations resources and treasures into private fortunes by creating factor systems and company towns (Idem).
Corporate executives paid “borers” to infest Congress and state capitals, bribing elected and appointed officials alike. They pried loose an avalanche of government financial largesse. During this time, legislators were persuaded to give corporations