What is Corporate “Personhood”?

What is Meant by Corporate ‘Personhood’?

We have all heard the term, “corporate personhood”, but what does that actually mean?

Corporate personhood is the legal concept that a corporation, a business organization, has many of the same legal rights and responsibilities as a natural person. This means that corporations can enter contracts, sue and be sued, own property, and pay taxes, among other things.

The concept of corporate personhood has its roots in ancient Rome, where guilds and other types of associations were given legal recognition as "corporate bodies." These corporate bodies were able to enter into contracts, own property, and perform other legal acts on behalf of their members. The idea of corporate personhood was later adopted by English common law and has since spread to most countries around the world.

How is a Corporation born?

A corporation comes into existence when a person (the “incorporator”) files Articles of Incorporation with a relevant governing body (i.e. the Provincial or Federal Governments).  The Articles of Incorporation set out the primary characteristics of the corporation, which we will discuss in later articles, but include, among other things, how many directors the corporation will have, the nature of its business, and its classes of shares.

Can a Corporation die?

In a sense, yes, a corporation can die.  If the directors of a corporation, with approval of its shareholders, wish to end the existence of a corporation, Articles of Dissolution can be filed, which, in essence and with certain caveats, ends the existence of the corporation.

Next Article . . . . The role of corporate directors