chapter  3
13 Pages

Corporations

In traditional communities. the clan was, on one hand, a continuous. albeit differentiated, flow of life and, on the other hand. a composite perpetual "moral person."! One was born as a discrete, finite particle of the tangible flow and granted a distinct place in the network of "ideal" relations that were the "community" in its social being.2 The composite moral person acted within the confines of a customary law that was "substantive" (as distinct from the market's formal "rules of the game"). That is, the custom typically demanded or permitted that "something" be done and thus also bestowed legitimacy on the content of act that followed. The norm did not merely defme the "how" of a decision process or just the form of a rightful action. ("Every nuclear family will be granted the use of a piece of land of an appropriate size," rather than "everybody is entitled to buy any piece of land, provided he fmds a seller and has the money to pay the agreed-upon price.")

artificial person has not only attained legal capacity in its own right; it has also been, so to speak, superimposed upon the natural person itself. For now the emphasis is on "the natural person [being] also artificial in contemplation of law." In other words, it is not only the avowedly juridical person that must be equipped by law with "rights, duties, liberties, [and] exposures"; appearances notwithstanding, the same is true of the natural person, or rather of what at first appears to be one. 12

"Corporation" goes back to corpus, or "body," and Roman jurists often used the image of the human body as a model of corpus in the legal meaning of the word. Most significantly, the relation between the whole (corpus) and its parts (corporati) would be construed as "interpenetration of the organs of the human body." Therefore, "the body as a whole was something else than just the sum of the organs, but it was not independent of them." By the same token, where there were no members ("organs"), there could be no corporation ("body"). Thus an artisans' guild or a troop of manual workers commanded to perform public works was granted the status of "corporation" in the sense of a whole distinct from the natural beings participating in it, but not completely detached from them. 13

A modem joint-stock company is, of course, a much more intricate grid of the visible and the invisible. (a) The corporation itself is, as already said, an intangible perpetual being. In its own way, however, it is also an individual entity because what the law does is to recognize (b) a distinct pre-existent collective will. This intangible will points to, and results in, a collective behavior called a Going Business, which is not a creation of the law and is not an artifact in this sense. The collective behavior is that of (c) a visible, living body of men and women who constitute the Going Concern whose Going Business the state sanctions by incorporating the company.