What is a Corporation?
The definition of a corporation is a company that is authorized to act as a single person, even in regards to the law.
Characteristics of a corporation:
In the earlier times they were established by charters, which designated the length of a term it could function.
Corporations are regarded as a person, when it comes to the law and other purposes, meaning they have the same rights as a person would.
Corporations are made up of various shareholders, with whom each own a portion of the company based on the amount of shares they own.
More than often corporations typically own other companies as well. Ex: PepsiCo owns Mountain Dew, Cheetos, Gatorade, Quaker, Doritos, Tropicana, etc.
How are Corporations Owned?
A corporation is essentially owned and controlled by the people who hold its shares. Typically, one share in the corporation means one vote every year on matters to do with the company. In large corporations, one share does not even make up one full percent of the total of votes, so in order to have an actual say in the company one would have to buy an extremely large amount of shares in order to hold a large amount of the votes.
How are Corporations Organized?
Corporations are usually organized by officers (CEO, secretary, CFO etc.). The shareholders in the corporation elect directors, who then appoint the officers to manage the corporation. Often times in smaller corporations one person will be the director as well as the officer, seeing as there are not a lot of people to maintain those positions.
History of a Corporation
Corporations began hundreds of years ago, and were most commonly building corporations, whether it be bridges or railways, as well as other various types. Corporations began by being dictated by charters, which claimed their purpose, as well as the amount of time in which they were allotted to do so. Also, when corporations first began, they were completely liable for anything that had a connection to their charter or
corporation. As time went on, charters were mostly eliminated from the process, but I knew ideology came about: a corporation being represented as a person especially in regards to the 14th amendments claim to equalization. They now have the same legal rights as a person, and can receive the same types of punishments a person would if they got into trouble with the law (being sued etc.). Corporations eventually became only partially liable for their actions.
Legal Issues?
Looking back to the past corporations, it has been found that they have gotten into a lot of legal trouble. Various corporations have had cases against them claiming that their products were improperly tested, which resulted in many physical and mental defects among the population, which resulted in being sued often, and for a lot of money.
Santa Clara V. Southern Pacific Railroad Company 1886
One of the oldest and most influential cases that has affected the way corporations are dealt with is the Santa Carla v Southern Pacific Railroad Company law suit of 1886. The Southern Pacific Railroad Company was designated to build a railroad which would allow trains to travel through various counties around California, as well as other places. When the railroad was built, fences were put up around it obviously to keep people safe from trains, but this is where the issues began. It seems as though during an assessment made by the State Board of Equalization of California for the railroad and all of its costs, and neglected to include the cost and taxation of the fences put up around the railroad, resulting in the surrounding counties being forced to pay the extra taxes. This eventually resulted in the argument regarding the equalization rights of the 14th amendment on the defendant’s side. One of the biggest arguments as to how the corporation should be regarded began, seeing as the 14th amendment states that all persons within a jurisdiction are allowed to equal protection and no state can deny any persons of that right and the company was not treated that way. The Southern Pacific Railroad Company had been denied their discount (due to their outstanding mortgage on this property) which ultimately swayed the courts into granting the defendant not guilty, as the assessment was illegal by neglecting the corporation’s rights.
Key Factors That Have Changed our Views on Corporations
1. One of the biggest and most significant factors of this case was how the 14th amendment took an effect on how the corporation was affected in the end. This whole case really caused the government to think about what “being a person” really is especially in regards to a massive company. The company was clearly not at fault for what the SBEC (State Board of Equalization of California) had neglected to include in their tax payment, and by forcing said payment onto the various counties, but in result that ideology was thrown out, forcing the government to have to reconcile on the entire idea of a corporation being a legal person and having the same rights as a legal person.
2. This was the moment of realization that changes had to be made, and corporations needed their own specific set of rights even if they are among the rights of a person. Seeing as the corporation managed to weasel their way out of these charges due to the neglect if their rights, it has become inevitable that they obviously have a lot of knowledge and power. This case really brought to the attention of the government that corporations need their own specific set of rules, so that cases like these can be solved and justice be served to whomever deserves the punishment.
3. This also changed the way lawyers go up against corporations in legal battles. As large corporations can manipulate the judicial system based on their given rights, lawyers and litigators can also manipulate the rules to earn proper justice for their clients. It altered the way the law truly looks at corporations and brought realization to the people, as it was very difficult to see a large company such as this as one single person, but in fact that is what they are legally.
My Findings
I found it interesting how corporations are actually people run, with all of their shareholders etc. Some corporations such as Coca-Cola are obviously very successful seeing as they still sell an extremely large amount of products, but after reviewing the SPRC (Southern Pacific Railroad Company) case it makes me very curious to know what kind of legal cases they have gotten themselves into overtime. One of the more interesting aspects I have learned about corporations is how dishonest and for lack of a better word “shady” they are in most cases. In a case like this, we see that they ultimately use their rights as a “person” to attempt to avoid being blamed for the damages caused by this neglect. After seeing the way the company manipulated their way out of charges by using their given rights and protection under the 14th amendment, it honestly makes me firmly believe that they should not in fact have those rights. Corporations are definitely not a “person” similar to the people I know and corporations often try to cheat their way out of situations, which ultimately should not be put up with. Although I know very little on the subject of the amendments, learning about the 14th was actually very interesting seeing as we also have similar laws about guarantee’s to our rights as Canadians. It has become inevitable with the NPRC case that due to the company being protected under the 14th amendment (although in this case they threw that rule out) they ultimately hold a lot of power, and as already proved, they can really take advantage of that power. Thinking about how just about every company is owned by some bigger corporation makes me slightly uneasy, as I feel that if I were to get into any legal battle with a corporation they would cheat me instead of giving me what is owed (compensation etc.) Learning about the result of the case I feel as though when buying lager items that are tied in with corporations, I will research the corporation’s history and make sure that I can’t get stuck in any unwanted situations.
Works Cited
“Corporation.” Wikipedia. Wikimedia Foundation, n.d. Web. 5 Nov. 2016. <https:// en.wikipedia.org/wiki/Corporation>.
Lutz, Ashley. “These 6 Corporations Control 90% Of The Media In America.” Business Insider. Business Insider, Inc, 14 June 2012. Web. 7 Nov. 2016. <http:// www.businessinsider.com/these-6-corporations-control-90-of-the-media-in- america-2012-6>.
“My New Company.” How Is a Corporation Organized and Managed? My New Company, n.d. Web.7 Nov. 2016. <http://www.mynewcompany.com/support/ Knowledgebase/Article/View/16/2/how-is-a-corporation-organized-and- managed>.
“Santa Clara County v. Southern Pacific R. Co. 118 U.S. 394 (1886).” Justia Law. Justia, n.d. Web.5 Nov. 2016. <https://supreme.justia.com/cases/federal/us/ 118/394/case.html>.
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