I’ve heard this about the US but never had it explained to me. What does it mean and are there any examples of this happening I can look into?
In: Economics
Basically this is just a way for corporations to get special treatment. People have a lot of rights that are beneficial to them to protect them. Companies don’t have as many rights, and tend to have regulations targeted towards them. For example as a person I have the freedom to say “Cap’n Crunch cures cancer”, but if Quaker Oats said the same thing they would probably be fined by the FDA, and told to stop.
Only people can enter into contracts. The concept of a juristic person was developed to allow companies to enter into contracts. Originally, companies were formed for specific purposes and limited timeframes. That has changed considerably throughout the years.
In the Supreme Court case Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886), the courts kind of extended 14th Amendment Equal Protection Clause to companies. There were several other cases that helped support companies free speech rights as well. As a result, companies have some of the same protections as you or I.
In the legal system they are treated as people. Just like a person, a company can hold property enter into contracts, and sue or be sued.
An example is Joe is a plumber. He can run his business as a sole proprietor. People pay him to unclog their pipes. Joe owns his own van, tools, and forms contracts for pipe unclogging.
Joe can start his own company. Joe LLC. Just like Joe did as an individual, Joe LLC (Limited Liability Corporation) owns the plumbers van, the tools, and enters into contracts to unclog pipes.
The advantage to having a company is Joe is then shielded from liability. If a pipe bursts while unclogging and he is sued as an individual, he can be sued for everything he has, but as an LLC, he is only sued for the assets of the company. It’s way more complicated than just this, but this is the gist.
This specifically gets brought up in context of corporations being “people” for certain legal purposes.
Essentially, treating them as “persons” means that they automatically have some of the same constitutional protections as individuals.
A lot of people get upset with this, because they think it lets corporations meddle in (for example) politics with fewer restrictions, do things that might be viewed as discrimination for an organization but not a person, or not get punished as severely as they could be if they didn’t have those protections.
Although usually, they only get worked up if the “bad” corporations they personally don’t like are getting away with things they disapprove of and give others a pass, and don’t realize (or ignore that fact) that a lot of things (including their favorite media outlets telling them what to think) are also corporations.
Burwell vs Hobby Lobby is recent and really famous/infamous example.
Obviously, like any legal concept, it can be abused, but at the same time, corporations are just groups of people, so it’s not entirely outlandish to say that people shouldn’t lose certain rights just because they’re working together as a business entity…
Latest Answers