ABSTRACT
What is a corporation? The law speaks of a corporation as a “legal person” – as a subject of rights and duties capable of owning real property, entering into contracts, and suing and being sued in its own name.2 Formany centuries, philosophers, political scientists, sociologists, economists, and among all jurists and legal scholars have debated heatedly as to what constitutes the “essence” of this soulless and bodiless person. In this so-called corporate personality controversy, one of the most celebrated controversies in legal theory and legal philosophy, two competing legal theories have emerged, each advancing a diametrically opposed view on the “essence” of the corporation. They are “corporate nominalism” and “corporate realism.”3 Corporate nominalism asserts that the corporation is merely a contractual association of shareholders, whose legal personality is no more than an abbreviated way of writing their names together. In opposition, the corporate realism claims that the corporation is a full-fledged organizational entity whose legal personality is no more than an external expression of its real personality in society. And both claim to have superseded the “fiction theory,” the traditional doctrine since the medieval times, which maintained that the corporation is a separate and distinct social entity but its legal personality is a mere fiction created by the state.
