How a Corporation Is Like a Person
A history of why US companies have the same legal rights as people, plus limited liability.
04 March 2010
The Supreme Court continues to define the rights of corporations
This is the VOA Special English Economics Report.
Recently the United States Supreme Court decided a big case about political speech. Political speech is considered the most protected form of free speech under the Constitution.
The case was Citizens United versus the Federal Election Commission. The question was this: With political speech, do corporations have the same rights as people?
By a vote of five to four, the conservative majority on the court decided yes. Companies, labor unions and other organizations may now spend as they wish on independent efforts to elect or defeat candidates.
The ruling is based on the idea in the United States and many other countries that a corporation is a legal person.
Historian Jeff Sklansky says a slow shift to personhood for American companies began with a Supreme Court ruling in eighteen nineteen. It said states cannot interfere with private contracts creating corporations.
In the ruling, Chief Justice John Marshall described a corporation as an "artificial being" that is a "creature of the law."
The ruling was unpopular. It came as Americans resisted big corporations like the First Bank of the United States, chartered by Congress. Some states passed laws permitting themselves to change or even cancel corporate charters.
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