Legal Status Of Corporations

moved from CorporateGovernment

Corporations are fictions, invented by nobility, to help them grab AuthorityWithoutResponsibility. Corporations are, in theory, accountable to the law, since corporations are persons, legally. Recent legal verdicts have claimed corporations have the full rights of citizens in the UnitedStates. They have authorities:

• They can own property, enter contracts, sue and be sued. They can exercise their FirstAmendment right to free speech.
• Now they can run for Congress (http://economix.blogs.nytimes.com/2010/02/02/corporation-says-it-will-run-for-congress/ :-)

But without the responsibilities.

• Corporations can't be arrested, imprisoned, or executed if they break the law. They cannot be "removed from society" the way normal (human) criminals can.
• Corporations are eternal. Corporations can exist indefinitely as long as they remain in the black, and even if they cease operations without entering bankruptcy. (This has particular bearing on copyright in the UnitedStates, since a corporation can hold a copyright beyond the life of the author.)
• Corporations can't be drafted or vote. Although they have shown to be very effective at political lobbying.

The lack of incarceration for corporations is the fundamental injustice in the whole CorporationsArePersons? legal fiction. If you or I engage in illegal behavior, and are caught, we are sanctioned and prevented from engaging in any social or political behavior for the length of the sentence. A corporation, on the other hand, is at best fined severely (Tobacco being a good example). (Forced corporate breakups have been rare in U.S. history.) So the stock price takes a hit (but why did the shareholders allow the company to engage in illegal behavior in the first place?).

The company remains active in society, after being punished financially. But, historically, chances are good it is still in business. Thus there is no incentive for a corporation to change its behavior, as long as it can remain profitable.

What's more, there is a fundamental conflict in the concept of a corporation. The officers of the corporation have a legal duty to maximize profit. They can be personally sued if it can be shown that they did not do everything legally possible to make money. What's wrong with that? a) The officers are legally bound to test the boundaries of the law. Often the boundary is reached and exceeded. b) The corporation has the financial incentive to lobby to move the boundaries of the law as they see fit. The proposed changes to the law are often not in the public interest. This is how we get CorporateWelfare.

Corporations are chartered; they don't come from nowhere. If they're not acting in the public interest, they should be dissolved. Courts should have, and use, the power to remove the offending corporation from society.

Due to their legal advantages, longevity, political connections, and wealth, corporations are the first-class citizens of the U.S. We (human) citizens are the underclass.

We made them. We can un- or re-make them. -- DanielCohen?

"Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person." --Jan Edwards and Molly Morgan, Women’s International League for Peace and Freedom (http://www.greens.org/s-r/35/35-19.html)

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Could you say, Daniel, that large payouts like the tobacco industry currently have to do are a reasonable equivalent to corporate jail time?

Daniel, under US law corporations are not citizens, but they are by legal fiat artificial persons under the law with the concomittant protections from government action of other persons. As you point out, they do not vote, but they do have some First Amendment protections. (BTW, I completely agree that judicial action to revoke charters -- the so called corporate death penalty -- should be much more common that it has been in the 20th century.) -- ClaudeMuncey

US Corporations are treated as citizens, not persons, since to get constitutional protection in the USA it's necessary to be a citizen. Illegal aliens are persons and look how they're treated.

The proof that US corporations are citizens under the law is the 1975 SUN-PAC decision by the Supreme Court that allowed corporate Political Action Committees to donate money to political campaigns (ie, legally bribe politicians) (http://www.korpios.org/resurgent/21More.htm). It gave no such right to foreign corporations. The Supreme Court in effect gave US corporations the right to vote. And since the corporate vote matters more than the formal vote, it's clear that human beings are second class citizens in the USA.

Large payouts by corporations are merely fines, nothing more. Jail time would be to suspend the corporation from all stock and other trading for a period. And since the US government is sponsoring tobacco industry exports into Asia by gunboat diplomacy, the "large payout" by the tobacco industry is worthless. -- RichardKulisz

(This has particular bearing on copyright in the UnitedStates, since a corporation can hold a copyright beyond the life of the author.)

I'm not sure about this. IamNotaLawyer, but from what I remember of copyright, there is currently no loophole for corporations to hold an indefinite copyright (unless you count Dizney's lobbying to lengthen the maximum term every time it threatens MickeyMouse). I believe it has to do with the fact that a corporation cannot technically be an author, and the term of a copyright is tied to the life of the original author, not the current holder of the copyright. If we ever got to a point that copyrights could be made effectively indefinite, they would lose all meaning.

Corporations can be authors. Corporations routinely commission creative work from people and buy the copyright: The term for this is WorkForHire?. This is common in the music and movie industries, for example: All major movies are copyright of the studio, not of the director or producer.

Just looked it up (http://www.loc.gov/copyright/title17/92chap3.html ; AmericanCulturalAssumption, even though I'm Canadian...). Was wrong about the details, but the gist is the same:

• 302. Duration of copyright: Works created on or after January 1, 1978

(a) In General. - Copyright in a work created on or after January 1, 1978, subsists from its creation and, except as provided by the following subsections, endures for a term consisting of the life of the author and 70 years after the author's death.

(b) Joint Works. - In the case of a joint work prepared by two or more authors who did not work for hire, the copyright endures for a term consisting of the life of the last surviving author and 70 years after such last surviving author's death.

(c) Anonymous Works, Pseudonymous Works, and Works Made for Hire. - In the case of an anonymous work, a pseudonymous work, or a work made for hire, the copyright endures for a term of 95 years from the year of its first publication, or a term of 120 years from the year of its creation, whichever expires first.

There is, or was, a legal challenge to the routine extension of copyright protection on the basis that it made it indefinite in fact if not in principle. Protection from the right to copy is supposed to be limited so anything that makes it indefinite should be struck down on that legal basis alone.