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Posted on September 3rd, 2012, by

Traditionally, corporations and persons were viewed as different subjects in legal terms. At the same time, the trend to identify corporations and persons in legal terms is widely spread, especially among those who are not acquainted with legal nuances and difference between legal rights and liabilities of corporations and individual. In fact, the correlation of corporations and persons as equal or identical subjects in legal terms naturally occurs because of certain similarities between corporations and persons from the legal point of view, but, when someone considers corporations as persons in legal terms, he or she fully ignores the actual difference that exists between humans and corporations and corporations cannot fully exercise the rights or liabilities which are unique characteristics of humans solely. In such a context, it is obvious that corporations cannot be identified with humans. Instead, corporations should be clearly distinguished from persons in order to avoid legal errors and misinterpretations. On the other hand, corporations are often personified and mistakenly leaders of corporations are identified with corporations themselves. As a result, the disambiguation occurs when the concepts of a person and corporations are mixed. At the same time, corporations are complex organizations, social structures which have their own responsibilities and rights and their rights and responsibilities can come into conflict with those of persons and, in such a context, corporations are often viewed as persons to resolve the existing contradictions or conflicts.

In actuality, the trend to associate or identify corporations and persons originates from the high level of the development of individualism in the western society (Mckay, 241). In fact, the western society traditionally tends to personalization of social relations as well as economic and political ones. What is meant here is the fact that western people often to personify organizations, including corporations, with certain individuals. As a rule, these individuals are leaders or, in some cases, founders of organization. The simple example can be drawn from the political life of the US. The official policy of the US is traditionally perceived by American people as the policy conducted by the specific person, the US President, while, in actuality, the US President is just the head of the executive power and a representative of certain political force. Consequently, he or she does not his or her and only his or her position, but the President should take into consideration political interests of his or her party and the US at large.

The same may be said about corporations. Often corporations are erroneously associated with their leaders and policies and actions of corporations are interpreted by the public as policies and actions of their leaders. However, leaders of corporations cannot stand for their personal interests solely since it is likely to lead to the failure of the corporation. In this respect, it is possible to refer to the example of Enron, whose executives misused their power and put their personal interests over the interests of the entire organization. From the legal point of view their actions could be qualified as fraud, but the fraud of the executives cannot be extrapolated on the entire organization. This would be a great mistake because Enron as a corporation was not a person and it was not liable to the legal responsibilities of persons, while its executives were liable and they were trialed for their illegal actions.

The example of Enron is very important in terms of understanding the difference between persons and corporations. In fact, this example stresses that corporations cannot be treated as persons in legal terms. If Enron was a person, therefore it would be liable to legal prosecution as its executives were, but, in such a case, innocent employees would be under a threat of the legal trial or its negative effects, while, in actuality, they did not commit any crime themselves. Therefore, the fraud of executives cannot be extrapolated on the corporation that means that the corporation cannot be viewed as a person because the entire organization, including all employees, cannot be responsible for illegal actions of a few.

On the other hand, opponents of such a view on corporations may argue that corporations are complex organizations where people develop complex relationships and each individual within the organization has certain legal rights and responsibilities (Pipes, 173). Therefore, in a way, each individual working within the organization is responsible for its policies. Moreover, corporations should be treated as persons because they may affect or violate rights of people and, to protect them, it is necessary to undertake actions which are normally taken in regard to persons. Returning to the example of Enron, it should be said that it affected interests of many persons, who were not working within the corporation. Therefore, Enron should take responsibility for actions of its executives to reestablish justice.

On analyzing both views, it is possible to conclude that corporations cannot be viewed as persons from the legal point of view. Naturally, they have certain responsibilities and rights but they can never be fully granted with rights and responsibilities as persons do. For instance, corporations cannot have the right to life or they cannot be limited in their rights as mentally ill persons can, etc. Therefore, corporations and persons should be clearly distinguished in legal terms.

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