Robert Lobell: On ‘corporate personhood’
Complaints about corporations usually focus on their status as “persons,” enabling economic rights (profits) to dominate at the expense of human rights.
Specifically, activists hope to amend the U.S. Constitution in order to nullify the political power of “corporate personhood.”
The problem is that while individuals have practically unlimited civil liability — meaning all their non-exempt income and assets can be garnished by a creditor — the civil liability of a “corporate person” is limited to the value of an investor’s stock (LLC).
In other words, while corporations benefit greatly from constitutional rights, they simultaneously benefit greatly from limited liability.
But if corporations are “persons” under the law, shouldn’t unlimited, or at least proportional, liability also apply to the “corporate person,” that is, to the investor?
Some will say that such liability would discourage investments. But if shareholders were responsible for corporate debt, investors would more likely take into account the human rights that corporations too often ignore, resulting in more ethical corporations.
Either that, or a return to the good old days, when legislators were quick to revoke the charters of abusive corporations.
After all, like other “persons,” corporations are prone to corruption when having it both ways — constitutional rights and limited liability.
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