Corporate personality United States corporate law

in principle duly incorporated business acquires legal personality separate people invest capital, , labor, corporation. common law had municipal , church corporations centuries, held supreme court in bank of united states v deveaux in principle corporations had legal capacity. @ center, corporations being legal persons mean can make contracts , other obligations, hold property, sue enforce rights , sued breach of duty. beyond core of private law rights , duties question has, however, continually arisen extent corporations , real people should treated alike. meaning of person , when used in statute or bill of rights typically thought turn on construction of statute, in different contexts legislature or founding fathers have intended different things person . example, in 1869 case named paul v virginia, supreme court held word citizen in privileges , immunities clause of constitution (article iv, section 2) did not include corporations. meant commonwealth of virginia entitled require new york fire insurance corporation, run mr samuel paul, acquired license sell policies within virginia, though there different rules corporations incorporated within state. contrast, in santa clara county v southern pacific railroad co, majority of supreme court hinted corporation might regarded person under equal protection clause of fourteenth amendment. southern pacific railroad company had claimed should not subject differential tax treatment, compared natural persons, set state board of equalization acting under constitution of california. however, in event harlan j held company not assessed tax on technical point: state county had included property in calculations. differential treatment between natural persons , corporations therefore not squarely addressed.

in citizens united v fec, supreme court in 5 4 decision removed power of state , federal legislatures control unlimited spending corporations on political campaigns, reasoning corporations persons under first amendment.

in late 20th century, however, issue of whether corporation counted person or purposes acquired political significance. initially, in buckley v valeo slight majority of supreme court had held natural persons entitled spend unlimited amounts of own money on political campaigns. on strong dissent, majority therefore held parts of federal election campaign act of 1974 unconstitutional since spending money was, in majority s view, manifestation of right freedom of speech under first amendment. did not affect corporations, though issue arose in austin v michigan chamber of commerce. differently constituted supreme court held, 3 dissents, michigan campaign finance act could, compatibly first amendment, prohibit political spending corporations. however, 2010, supreme court had different majority. in 5 4 decision, citizens united v federal election commission held corporations persons should protected in same natural people under first amendment, , entitled spend unlimited amounts of money in donations political campaigns. struck down bipartisan campaign reform act of 2002, anti-hillary clinton advertisement ( hillary: movie ) run pro-business lobby group. subsequently, same supreme court majority decided in 2014, in burwell v hobby lobby stores inc corporations persons protection of religion under religious freedom restoration act. specifically, meant corporation had have right opt out of provisions of patient protection , affordable care act of 2010, require giving health care employees board of directors of corporation might have religious objections to. did not address alternative claim under first amendment. dissenting 4 judges emphasized view previous cases provided no support notion free exercise [of religious] rights pertain for-profit corporations. accordingly, issue of corporate personality has taken on increasingly political character. because corporations typically capable of commanding greater economic power individual people, , actions of corporation may unduly influenced directors , largest shareholders, raises issue of corruption of democratic politics.