After the Civil War in the eighteen sixties, the Fourteenth Amendment was added to the Constitution. It provides that no state may "deprive any person of life, liberty or property, without due process of law ... " If a corporation is legally a person, then states cannot limit corporate rights without due process of law either.
At first, corporations were not fully recognized as persons. But Jeff Sklansky at Oregon State University says that changed.
JEFF SKLANSKY: "The general direction of the Supreme Court and the federal courts in general was to recognize corporations as persons with the same Fourteenth Amendment rights as individuals."
Yet corporations have a right that real people do not: limited liability. For example, a corporation can face civil or criminal fines and individual lawbreakers can go to jail. But limited liability means the actions of a corporation are not the responsibility of its shareholders.
Jeff Sklansky says the nineteenth century development of limited liability helped shape the modern corporation.
JEFFREY SKLANSKY: "That is also crucial to allowing corporations a kind of independent personhood and separating ownership from control or ownership from management. So [the idea is] that I can invest in a corporation without becoming liable for all its debts. That’s a really big deal. Without it, anything like the modern stock market, I'd say, is impossible."
And that's the VOA Special English Economics Report, written by Mario Ritter. Next week, more on corporations and the law. I'm Steve Ember.
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2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25
2013-11-25