7.5 Theories of Corporate Personality

The classic four — present as a table and critique each (a perennial long-answer): Theory Champions Core claim Critique Fiction theory Savigny, Salmond, Windscheid The corporation is a fiction/ abstraction; only natural persons are real; personality is artificially conceded by law for convenience Explains why personality is statutory; cannot explain why the State itself (a corporation) can confer what it does not possess; ignores the sociological reality of group life Concession theory (Variant of fiction; favoured in continental public law) Personality is a concession/ grant by the State; no group is a person unless and until the sovereign admits it Makes personality arbitrary and politically contingent; historically corporatism was used both to enable and to suppress associations Realist (organic) theory Gierke, Beseler — the German school The corporation is a real, living organism — a social organism with a collective will as genuine as an individual's; law recognizes, does not create, its personality Metaphysically heavy; struggles to explain one-member companies and corporations with no members at all Purpose/ Bracket theory Brinz, Ihering The "person" is a device: bracket the members, and what remains is a purpose (property dedicated to a purpose, e.g., a foundation) served by law Reduces personality to bookkeeping; explains memberless foundations well but memberful companies poorly Kelsen adds the pure-law view (person = personified bundle of norms),…