A central point of discussion in recent years has been the role that corporate money should and should play in democratic politics. This is part of the broader debate about campaign finance reform and the role money can play in politics. Basically, the advantage of a partnership is that it can be a very simple and profitable business unit. Very few formalities are required, and the costs are generally low, not only to create a general partnership, but also to manage one. In the Middle Ages, a legal “personality” could facilitate the eternal collective possession of assets beyond the life of the founders and avoid the inheritance of personal property. Later, integration was advocated as an effective and secure form of economic development: the advantages over existing partnership structures included the survival of society in the event of the death of a member; the ability to act without unanimity; and limited liability. [1] The word “corporation” itself is derived from the Latin corpus (“body”), and the corporate personality is often assumed in medieval writings; During the Renaissance, European jurists were of the consistent view that government-accredited churches and universities could acquire property, enter into contracts, sue and be sued, regardless of their membership. The government (or the pope) granted religious organizations “the power of eternal succession”: the property of the Church would not revert to the local lord and would not be taxed after the death of the members of the Church. Some city rights expressly granted medieval towns the right to self-government.
Commercial efforts were not part of the societies founded in the Middle Ages, and even risky trading companies were originally run as common law corporations rather than corporations; The incorporation of the East India Company`s monopoly in 1600 was innovative, and by the end of the century commercial enterprises often sought incorporation in Europe and the Americas. By the 19th century, the orientation of British and American corporate law had diverged; British law at the time (such as the Joint Stock Companies Act of 1856) seemed to focus more on companies that were more akin to traditional joint ventures, while American law was motivated by the need to manage a more diverse corporate landscape. [3] In a historical context in the United States, the term “legal personality” refers to the ongoing legal debate about the extent to which rights traditionally associated with individuals should also be granted to corporations. A main note issued by the court reporter in the Supreme Court`s 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad Co. purported to indicate the court`s purpose with respect to the fourteenth amendment equality clause as it applies to corporations, without the court actually making a decision or making a written statement on the matter. [5] This was the first time the Supreme Court had concluded that the equality clause of the Fourteenth Amendment granted constitutional protection to businesses and individuals, although many other cases had passed since Dartmouth College v. Woodward had recognized in 1819 that corporations were entitled to some of the protections of the Constitution. In Burwell v. Hobby Lobby Stores, Inc. (2014), the court found that the Religious Freedom Restoration Act of 1993 exempted Hobby Lobby from aspects of the Patient Protection and Affordable Care Act because those aspects significantly burdened the free exercise of narrow religious beliefs by the owners of the business. [6] In legal proceedings concerning companies, shareholders are not liable for the debts of the company, but the company itself is obliged as a “legal person” to repay these debts or to be sued for non-repayment of debts.
[22] For more information on legal entities, see this article in yale Law Journal, Wake Forest Law Review, and Penn State Journal of Law and International Affairs. Laws relating to professional organizations (e.g. Corporations, partnerships, limited liability companies, etc.), often use the term “legal entity,” so the laws apply to both individuals and non-human business entities. Since the Supreme Court decision in Citizens United v. In 2010, the Federal Election Commission, which defends the rights of corporations to unlimited political spending under the First Amendment, made several calls for a constitutional amendment to abolish corporate personality. [10] Citizens United`s majority opinion does not refer to the personality of the company or the Fourteenth Amendment, but argues that the right to political expression does not depend on the identity of the speaker, who could be a person or an association of persons. [11] [12] The legal person allows one or more natural persons (universitas personarum) to act as a single entity (company) for legal purposes. In many jurisdictions, artificial personality allows that company to be considered legally distinct from its individual members (for example, in a public limited company, its shareholders). They can sue and be sued, enter into contracts, incur debts and own property.
Companies with legal personality may also be subject to certain legal obligations, such as the payment of taxes. A company with legal personality can protect its members from personal liability. But a note that the court reporter wrote about the title of the decision went even further. Although another private note from the Chief Justice stated that the court had deliberately avoided the issue of constitutional protection for businesses, the journalist decided to make his own addition to the records. He noted that the court had ruled that companies are individuals under the 14th Amendment and as such, they are subject to the same legal protection as all others [source: Hartmann]. S companies are like the Lite versions of C companies. They have very simple ownership and business structures. S companies have only one class of shares and cannot have more than a hundred shareholders.
During the colonial period, British companies were chartered by the Crown to do business in North America. This practice continued in the early United States. They have often been granted monopolies as part of the charter process. For example, the controversial Bank Bill of 1791 created a 20-year corporate monopoly for the First Bank of the United States. Although the federal government has chartered companies from time to time, the general chartering of companies has been left to the states. In the late 18th and early 19th centuries, companies were licensed in large numbers by the states, according to general laws that made establishment possible at the initiative of citizens and not by specific laws of the legislature. A business is a type of business unit created specifically to conduct activities such as running a business, while being officially treated as an individual in various ways. Although it can be composed of many different people, such as directors, officers and shareholders, a company is a legal entity in itself.