Talk:Corporation

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Close Corporation[edit]

I added information about a close corporation. I am not sure what the equivalent terminology is outside of the US - does someone know? Also, I added it to "formation", but it may be more appropriate elsewhere? Nikitab (talk) 06:30, 25 May 2013 (UTC)

Criticisms[edit]

This section is badly written and doesn't make sense. E.g. " when ownership is separated from management (i.e. the actual production process required to obtain the capital), " the actual production process required to obtain the capital? What does this even mean? Capital is obtained externally by a corporation (usually from shareholders/owners) and is not an output of the production process unless you broaden the definition to include retained earnings, though I doubt that this is the intention of what was said. — Preceding unsigned comment added by 62.209.27.124 (talk) 11:01, 14 December 2011 (UTC) "Mutual Benefit Corporation" redirects to a non-existent section of this page. — Preceding unsigned comment added by 184.2.112.28 (talk) 06:25, 1 May 2013 (UTC)

"The US is a corporation"[edit]

Archives: /Archive1; /Archive2; /Archive3

I deleted this incorrect statement:

In the context of debt collection, the United States is itself legally defined as a "Federal corporation".[1]

The link goes to a section of the US Code that uses the term "corporation" for shorthand for several entities. This is not a "legal definition" of the United States of America as a corporation. Comet Tuttle (talk) 22:38, 7 June 2010 (UTC) the u.s. is definitely not a corporation, its an empire 69.140.35.147 (talk) 09:42, 27 September 2010 (UTC)

Lock down[edit]

The Corporation article is on lock down since it's really good and doesn't need improvement. The article makes complete sense, esp. because it is really really good and has a lot of sites. Thank you for locking htis article, so Prof. Todd can't mess with it. He doesn't make any sense and wants only bad things. Thanks for the lock down and keep it up!!! —Preceding unsigned comment added by 98.207.96.124 (talk) 22:44, 8 June 2010 (UTC)

Corporate Law section[edit]

It's my understanding that the "directing mind and will", or identification, doctrine has been supplanted by the theory of rules of corporate attribution in the law of the United Kingdom (and NZ, I don't know about the US) - see Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, per Lord Hoffman. Lord Hoffman explains that the primary rules of attribution are found in the company's constitution (articles of association, etc), or in company law - i.e. the rule that the informal unanimous assent of the shareholders binds the company. The general rules of attribution are the rules of agency, which are equally available to natural persons. He goes on to refer to the need to fashion special rules of attribution in order to apply statutory rules to companies when the rule is intended to so apply but specifies some action or state of mind be possessed by the person himself as opposed to by his servants or agents.

Should the quotation referring to the identification doctrine be replaced by one reflecting a modern understanding of corporate attribution? Landon3 (talk) 10:05, 19 June 2010 (UTC)

Regarding shareholders as "capital providers" or "investors"[edit]

There seems to be a question of whether shareholders are actually the "contributors of capital." Adolf Berle of the Roosevelt Braintrust who wrote THE text on the modern corporation with Dr. Means provides the view that "By folklore habit we say the buyer of stock of AT&T or General Motors has "invested in" these companies; but this is pure fiction." This quote comes from Modern Functions of the Corporate System by Adolf A. BerleSource: Columbia Law Review, Vol. 62, No. 3 (Mar., 1962), pp. 433-449. Here is the context.

"When I buy AT&T or General Motors, I do not remotely "invest in" either concern. I have bought from Nym, who bought from Bardolph, who bought from Pistol, who bought through ten thousand predecessors in title from Falstaff, who got the stock when originally issued. Let us assume Falstaff was a genuine investor-that he bought the stock directly from the corpora-tion, or as promoter, or in some other fashion contributed to the enterprise. This contribution, the only real "investment" in the chain, was probably an infinitesmal fraction of the price I paid to Nym. Now what Nym does with the price he receives from me nobody knows; the one certainty is that he does not contribute any of it to AT&T or General Motors."

In one set of circumstances, we do know approximately what happens. This is in the case of "institutional" buying and selling. It accounts for about twenty per cent of all stock exchange transactions. When the X mutual fund sells AT&T it commonly uses the proceeds to buy General Motors or some other stock. But, again, it is certainly buying stock from Nym, not putting money into General Motors. By folklore habit we say the buyer of stock of AT&T or General Motors has "invested in" these companies; but this is pure fiction."Buddylovely (talk) 13:44, 11 July 2010 (UTC)

Continuing the quote:" Now if General Motors were regularly raising capital by selling stock in the market, my purchase of General Motors stock from Nym would have an effect on the price of its shares. This in turn would have an effect on the price at which General Motors could float a new stock issue. In the utilities industry, where new stock issues are standard practice, there is a traceable effect on the price the utilities pay for new capital. But the great industrial companies do not (or only at very rare intervals) seek capital by floating common or any other kind of stock. Many companies, and these the largest, either have never done so or have done it so rarely that the rise and fall of the price of their shares has no traceable effect on the price they have paid or will later pay for capital; for the most part they generate their capital internally. So far as they are concerned, the market price for their stock has only a psychological effect. In fact, if the stock market shut down com-pletely (as it did in 1914), or if all of their stock were miraculously wiped out, it would not have a great effect on their operations, though it might have tangible effect on the number of buyers ready, willing, and able to buy their cars or washing machines. It is theoretically possible, of course, that the money invested by people buying in the stock market somewhere, somehow, contributes to investment capital. It would have to be demonstrated that a margin of the sellers of stock eventually "invest" some of their proceeds in new enterprises or new security issues. Buddylovely (talk) 13:47, 11 July 2010 (UTC)

I don't see the problem, because this article doesn't directly address the fact that secondary shareholders are not owners. Where does the question come up? --Jonovision (talk) 06:17, 12 July 2010 (UTC)

Dear Sir, The cited material is in regards to the debate about whether shareholders are or in fact are not generally,"contributors of capital." I don't believe the cited material mentions ownership at all. However, Adolf Berle wrote a book about the subject if you are interested. —Preceding unsigned comment added by Buddylovely (talkcontribs) 07:05, 15 July 2010 (UTC)

That's fine, but nobody is actually debating whether secondary shareholders are contributors of capital. The article doesn't even address that subject. --Jonovision (talk) 04:53, 16 July 2010 (UTC)

I have found 3 quotes, which are listed below, in the introduction that state that shareholders are the "contributors of capital" and "investors". I do not believe that a reader can infer from the introduction that the shareholders referred to are in fact the original investors who received the original share for their investment. Rather, the implication is clearly that ALL shareholders are investors of capital. 1st paragraph: "...shareholders who invest capital" 2nd paragraph: "shareholders normally only stand to lose their investment..." Last paragraph: "Shared ownership by contributors of capital."Buddylovely (talk) 12:04, 16 July 2010 (UTC)

Although those quotes were all written by different editors, I don't think any of them were intended to convey the idea that all shareholders are owners. I didn't get that impression from reading it. I agree that it is a common misconception, but I don't think our article introduction is worded in a way that makes it worse. --Jonovision (talk) 22:02, 17 July 2010 (UTC)

Dear Sir, I am not sure what to make of your first sentence, "...I don't think any of them [the authors] intended to convey the idea that all shareholders were owners." But the issue is that in the article shareholders are called "investors" or "contributors of capital", not owners. In fact, I don't see where shareholders are referred to as owners. I assume that you've made a typo and meant to write "investors" not "owners". Let me try to understand your logic: although we both agree that there is a mistake in the article that could easily be corrected, you don't think it's necessary because (1) the mistake wasn't intended and (2) because perpetuating the mistake doesn't make the misconception in society worse. Does this fairly represent your view?Buddylovely (talk) 10:57, 18 July 2010 (UTC)

Okay, I must be misunderstanding you. I don't think there is a mistake in the article. Can you tell us again what you think the problem is? You don't need to bring up quotes or references to justify what you're saying, but just tell us in a sentence or two "I think the article is wrong, because..." --Jonovision (talk) 21:37, 18 July 2010 (UTC)

Sure. The main problem is that, contrary to what's written in the article, shareholders are NOT investors or contributors of capital. As Berle mentions, most of a corporation's capital is generated internally, not supplied by shareholders. By calling shareholders something that they are not, truth remains hidden and the collective consciousness suffers. In The Speculation Economy 2009, Mitchell explains that at the turn of the 19th century shareholders changed from investors to speculators. The same goes for Marjorie Kelly in The Divine Right of Capital. The fact that shareholders are clearly NOT investors or contributors of capital, but still called this is because the terms are remnants of 19th century classical economics, which is still taught in universities. This is exactly what Berle discusses in his paper The Impact of the Corporation on Classical Economic Theory (The Quarterly Journal of Economics, Vol. 79, No. 1 (Feb., 1965), pp. 25-40.) The bottom line is: why not be accurate if it's easy to do so? Thank you for your time.Buddylovely (talk) 14:39, 19 July 2010 (UTC)

My understanding is that the term "shareholder" can be used either way: it could refer to a single or a few owners of a company, or it could refer to secondary shareholders who bought their shares on a stock market. The term "investor" is equally broad, and could include speculators. The article, as it is written now, is careful to avoid using those terms in an inappropriate way. For example, it says that a corporation can have "shared ownership by contributors of capital" -- the term "shareholders" doesn't appear in that sentence at all. --Jonovision (talk) 20:25, 19 July 2010 (UTC)

To determine how broadly a term can be used, I would suggest consultation with an outside source, such as a dictionary. Of course, definitions vary, but Princeton says: an investor is "someone who commits capital in order to gain financial returns" and defines a speculator as "someone who risks losses for the possibility of considerable gains". A shareholder commits no capital to a corporation except in the rare case of an IPO; therefore, shareholders are generally not investors. Rather, most shareholders, while not investors, do risk their own wealth for a possible gain, like the speculator.

Some people unintentionally call shareholders "investors" because they have been taught in 19th century classical economics. But they use the term incorrectly. Adolf Berle discusses why shareholders are NOT investors and why they shouldn't be called investors. The point is that if shareholders are not investors, why not avoid the controversy by simply referring to shareholders simply as shareholders?

Regarding the quote, "shared ownership by contributors of capital", I realize that it is not stated, but this is a clear reference to shareholders. I don't mind discussing it, but I think it's self-evident that the passage refers to shareholders. We might discuss it in a different section. Thanks.Buddylovely (talk) 12:01, 20 July 2010 (UTC)

But shareholders are investors. In the broadest sense of the term, an investor is anyone who commits wealth (capital) in hopes of gaining a return. In this sense, the term "investor" includes both owners and secondary shareholders.
The same goes for the second quote ("shareholders normally only stand to lose their investment..."). This is true of both owners and secondary shareholders.
The third quote, on the other hand ("shared ownership by contributors of capital"), quite clearly avoids the term "shareholder". I really don't see how you think it's self-evident that he really means shareholder. --Jonovision (talk) 07:45, 21 July 2010 (UTC)

Dear Sir, The distinction that must be made is between capital used in production and the personal wealth of the shareholder. "Investment" in business is the capital used in production. Money paid for stock in the secondary market is not capital used in production. However, the shareholder does commit his wealth seeking a return, much like a gambler at a poker table. The quote "shareholders tend to lose only their investment..." like a gambler loses his "investment" on the poker table. But this would be in accurate because gamblers don't "invest" in the game, no one uses his money as capital to make things. A better phrase for the article would be "shareholders tend to lose only what they paid..." An easy change that avoids the controversy. Regarding the quote "shared ownership by contributors of capital," to whom do you think the quote refers.Buddylovely (talk) 10:19, 21 July 2010 (UTC)

I understand what you're saying, but I think you're nitpicking quite a bit. Even a dictionary doesn't provide more than a broad definition of the words "invest" or "capital". I don't think there's difference in saying "I bought shares of Enron, but I lost my investment" or "I put money into my own business, but lost my investment when it went bankrupt". Sure, those are very different situations, but a corporation's limited liability applies in both cases. The same goes for the word "capital". It's just being used in its broadest sense. --Jonovision (talk) 12:00, 21 July 2010 (UTC)

It is true that the difference between investing one's wealth in the productive capacity of a business (i.e. supplying capital) and investing one's wealth in a poker game is subtle--in fact, I used invest in both cases. But this subtlety is what Adolf Berle was referring to in the quote above as something of great importance. Why. Because we must distinguish between those who provide capital for productive capacity and those who do not. Thus, the money you "invest" in a poker game is not the same as the money you invest in productive capacity, which is capital for a business. Shareholders in the secondary market make side bets on the productive capacity of a business, but provide no capital. So the difference is that one person invests capital in the productive business and the other person makes a side-bet on the company's performance. A subtle but important difference.Buddylovely (talk) 14:53, 22 July 2010 (UTC)

This is probably a bit too much detail to go into in the article introduction. After all, we're covering both private and public corporations, and there's countless other details that have been left out. As long as the intro isn't wrong, I'm okay with it being a bit vague and general. Perhaps the Shareholder article would be a good place to start. We could add a new section discussing this whole issue. One thing that would be good to know is whether it's true of corporations globally. We know that it's true in the US at least, but what about other countries? --Jonovision (talk) 06:53, 23 July 2010 (UTC)

I agree that this is too much detail for the article, but the detail does not need to go into the article. It is easy to change the article so it doesn't call shareholders something we agree they are not: "suppliers of capital" or "investors" These adjustments can be made easily without detailed discussions. Without making these changes, there is no doubt, according to Adolf Berle et al., the introduction is wrong. It incorrectly calls shareholders investors when they contributed no capital to the corporation. The introduction makes very clear and incorrect implication that shareholders supply capital for production when they, in fact, do no such thing. Bottom line: the intro is incorrect on a very important issue and should be changed.Buddylovely (talk) 13:37, 23 July 2010 (UTC)

Well, there's no harm in removing the part that says "shareholders who invest their capital" and just making it say "shareholders". (I disagree with you that it's wrong, because I think someone is reading too much into it if they come to the conclusion that shareholders are owner). This version will be shorter, which is good for the article introduction. --Jonovision (talk) 03:21, 24 July 2010 (UTC)

Dear Sir, I agree with you that little harm is done by simply calling shareholder, "shareholders". Thank you. BTW, I think you made a typo with "owner" again, rather than "investor", but I get you, although I disagree. I realize it seems like a small difference, calling shareholders "investors", but this improper labeling of shareholders has been used as a reason to provide CEOs with stock options. These stock options resulted in the financial scandals of the late 1990s, which is well documented and admitted to by Micheael Jensen and Kevin Murphy. The point is that when people place shareholders on a pedestal on which they don't belong, bad things happen. Maybe I will give the shareholder section a shot, explain things there, then bring it back here as you suggested. Thanks again for you time and openmindedness.Buddylovely (talk) 12:38, 25 July 2010 (UTC)

I've done the edit and changed "creditors who provide loans, shareholders who invest capital" to just "creditors, shareholders", since the term "creditor" isn't limited to loan providers. --Jonovision (talk) 02:50, 26 July 2010 (UTC)

Excellent. But I have to ask, what do creditors provide except for loans?Buddylovely (talk) 11:45, 26 July 2010 (UTC)

Creditors can and do usually include employees with unpaid wages, suppliers with unpaid accounts, and government bodies with money due them (like taxes collected). So creditors are not restricted to lenders (who provide loans). Legacypac (talk) 09:46, 14 May 2013 (UTC)

Nonprofits[edit]

First, the word is spelt "nonprofit" without the hyphen. Like most prefixes (and suffixes) added to root words to create new combined words, there is no hyphen unless confusion would be caused or duplication of vowels would result. Think of the prefixes "un," "pro," "pre," "do," and so on. Common exceptions are prefixes which are words standing on their own, e.g., "cross," "elect," "odd," and combined words in which the root is a Capitalized proper noun, e.g., "antisocial," but "anti-American." However, correct grammar and spelling can be debated elsewhere.

Second, and more to the point, under the subhead United States the sentence "Tax-exempt non-profit corporations are often called “501(c)3 corporation”, after the section of the Internal Revenue Code that addresses their tax exemption." contains an error in fact.

Internal Revenue Code (IRC) Section 501(c)(3) refers to "religious, educational, charitable, scientific, literary. . . " organizations. There are 27 other subsections to 501(c) and eight other tax exempt types of organizations defined in the IRC. See IRS Publication 557 http://www.irs.gov/pub/irs-pdf/p557.pdf for a table describing them all. "Tax exempt" "charitable." "Nonprofit" "charitable" or "501(c)(3)."

Oh, and do notice that the IRC Section is properly referenced with both subsections in parentheses-- Section 501(c)(3), not 501(c)3.

Tloc (talk) 20:02, 14 July 2010 (UTC) —Preceding unsigned comment added by Jonovision (talkcontribs)

Edit request from Grumbely, 17 July 2010[edit]

{{editsemiprotected}}

Requesting for sv:Kooperation to be changed into sv:Korporation. The link is refering to a completely unrelated (but obviously similar-sounding enough word). "Korporation" is the proper translation.

It's even clearly stated in the Swedish article for Kooperation that the word is "not to be confused with korporation".

Kooperation means cooperation, and korporation means corporation.

Thanks in advance!

Grumbely (talk) 20:34, 17 July 2010 (UTC)

Done! Thanks. Kuru (talk) 20:50, 17 July 2010 (UTC)

Not all corporations throughout history or the world are formed by states[edit]

I was trying to make this edit. Unfortunately, I didn't state this in the edit and BlueHaired Lady undid it. I redid it and I'm hoping it stays. — Preceding unsigned comment added by Buddylovely (talkcontribs) 16:22, 22 April 2011 (UTC)

Corporate Structure?[edit]

Excuse me if this is the wrong place to put this request. I'm new to Wikipedia and am really just guessing as to where to go to ask for more information.

I was looking for a flow chart that showed the organization of a typical corporation (board of directors on top, CEO, VPs, various departments underneath), so I looked under "Corporate Structure" and didn't find much except a link to this article on corporations generally. But this one didn't discuss corporate structure or governance, either. It appears to me that there's a hole waiting to be filled, but I myself am ill equipped to fill it, since I'm a user, not a provider.

Can anyone help?   RichardSRussell@tds.net — Preceding unsigned comment added by 184.60.36.89 (talk) 18:10, 25 October 2011 (UTC)

Corporations can exercise human rights?[edit]

The article claims "Corporations can exercise human rights", which sounds very strange and is not supported by the source cited (South African Constitution Art.8, especially Art.(4)). That constitution does not mention the word "corporation" and does not use a synonym or talk about anything similar when it mentions human rights. --Espoo (talk) 07:42, 2 June 2012 (UTC)

A "juristic person" is a synonym for corporation. — Blue-Haired Lawyer t 08:28, 2 June 2012 (UTC)
I agree that the text you cite makes little sense. You're left with the question: what human rights does the corporation have? Unless that is listed, I think the text cited should be deleted. 12:07, 20 July 2012 (UTC)12:07, 20 July 2012 (UTC)12:07, 20 July 2012 (UTC)12:07, 20 July 2012 (UTC)12:07, 20 July 2012 (UTC)12:07, 20 July 2012 (UTC)~ — Preceding unsigned comment added by Sigiheri (talkcontribs)
Also, under what jurisdictions? 88.159.69.140 (talk) 00:46, 28 October 2013 (UTC)

What law is referred to here..[edit]

"Despite not being natural persons, corporations are recognized by the law " - which law is this referring to? I think the article is trying to say that under various jurisdictions corporations can be treated as persons in some respects, however as written it seems to be referring to the law of a single country. — Preceding unsigned comment added by 219.89.82.248 (talk) 22:24, 9 October 2012 (UTC)

All laws in all countries concerning corporations (that I am aware of) make this distinction. Legacypac (talk) 09:49, 14 May 2013 (UTC)

Why does "Third World" redirect to this page?[edit]

Reading the articles for the First, second and third world, typing "Third World" redirects to this page, though there is an entry with that exact title. Links from other articles do function correctly.65.191.6.31 (talk) 12:05, 25 March 2013 (UTC)

Shareholders do not own the corporation[edit]

I have fought this battle here several times before as the arguments get archived. Shareholders of large public corporations are not the owners of the corporation. Ownership is determined in law as based on a bundle of rights and duties (See Honore' 1961). The typical shareholder has none of these rights and duties.

This fact that shareholders of large public corporation DO NOT own the corporation is explained in Company Law and The Myth of Shareholder Ownership by Ireland (1999) (See http://kar.kent.ac.uk/1939/1/Myth_of_Shareholder_Ownership.pdf), Shareholder Ownership and Primacy by Velasco (2010) (See http://illinoislawreview.org/wp-content/ilr-content/articles/2010/3/Velasco.pdf) and Bad and Not So Bad Arguments for Shareholder Primacy by Stout (2002) (See http://www-bcf.usc.edu/~usclrev/pdf/075504.pdf)

Also, see the book by Stout (2012) called The Myth of Shareholder Value, Greenwood (http://people.hofstra.edu/Daniel_J_Greenwood/pdf/Hofstra.pdf). There are a lot more I will cite if needed.

Only if shareholders have control of the corporate decisions can they possibly be considered owners. They do not. Their vote in practice is ineffectual in determining Board of Director composition. Professor Bebchuk studied proxy contests conducted by all listed companies between 1996 and 2004, finding that only 17 corporations, with a market capitalization over $200 million, experienced proxy contests to replace management outside of the takeover context. Of these, only 2 of the insurgents won. “A plausible interpretation of the evidence is that, even when shareholder dissatisfaction with board actions and decisions is substantial, challengers face considerable impediments to replacing boards.” (Bebchuk 2005 p. 13)

The bottom line: Shareholders of large public corporations are NOT the owners. Sigiheri (talk) 00:01, 5 May 2013 (UTC)

This makes no sense. Ordinary shareholders are the legal owners of the company. If a man owns all of the shares of a company, he owns the company. This is true whether the company is public or private, large or small. You can cite as many sources as you want. That the effective control of a company with a large number of small shareholders by those shareholders may be virtually non-existent doesn't change the fundamental definition of what a share is: a unit of ownership. A definition you appear to have refrained from removing from the share article. Perhaps you might add a section of the ownership question to the article itself, rather than just making posts here. — Blue-Haired Lawyer t 00:29, 5 May 2013 (UTC)
It is true that if someone owns ALL of the shares, or even 51%, s/he controls the corporation. But that is why I was careful to say, large, public corporation, implying that there is no controlling shareholder. Blue Hair Lady says that a share is a "unit of ownership". This is obviously tautological. Blue Hair feels the opinions of legal scholars publishing in peer reviewed journals is irrelevant and that I can "cite as many sources as (I) want." But this is not how Wikipedia works. Just because Blue Hair feels she is right despite contrary evidence from experts does not make her right. — Preceding unsigned comment added by Sigiheri (talkcontribs) 01:11, 5 May 2013 (UTC)
Even large public corporation can have controlling shareholders (see News Corporation). But your edits go considerably beyond only applying to stock-exchange companies. You delete all statements indicating that shares in somehow relate to ownership irrespective of the proportion of ownership. You also delete sources which disagree with your position whilst refraining from including your own sources in article text. Even one of sources you list says that:
page 32
"In Part II, I addressed the arguments that form the core of the contemporary critique of the traditional view. I showed that these arguments fall short of establishing that shareholders are not owners. "
page 56
"I hope to demonstrate not only that the traditional view is perfectly viable, but also why it is reasonable for those outside of the academy to adhere to it... The central tenet of the traditional view is that the shareholders own the corporation."
I have been trying to compromise by saying that shareholder are the theoretical or legal owners, while encouraging you to write a section of the debate over shareholder ownership. — Blue-Haired Lawyer t 11:44, 5 May 2013 (UTC)
Did you read the article that you're quoting? The article makes it clear that the "traditional" view that shareholders own the corporation has been successfully challenged by 2 groups of scholars: contractarian and collective. His opinion is the only one that attempts to refute them and it does a poor job. If we going to rely on peer reviewed research, we should rely on those most cited (e.g. Stout, Greenwood).
So if we are going to base the wiki article on legal scholarship, you have this one article and I have all the ones it's referencing and more. You lose. If not on legal scholarship, on what should the wiki article be based?Sigiheri (talk) 17:30, 5 May 2013 (UTC)
Martin Lipton: "Shareholders do not “own” corporations. They own securities—shares of stock—which entitle them to very limited electoral rights and the right to share in the financial returns produced by the corporation’s business operations. Conceiving of public shareholders as “owners” may in some instances be a helpful metaphor, but it is never an accurate description of their rights under corporate law." Martin Lipton & William Savitt, The Many Myths of Lucian Bebchuk, 93 VA. L. REV. 733,

754 (2007)Sigiheri (talk) 19:02, 5 May 2013 (UTC)

I think it would help if those who believe that shareholders are owners read some of the legal scholarship on the subject. This is a reasonable article: http://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=1002&context=sulr&sei-redir=1&referer=http%3A%2F%2Fscholar.google.com%2Fscholar%3Fstart%3D30%26q%3DSHAREHOLDER%2BOWNERSHIP%2BAND%2BPRIMACY%2Bvelasco%26hl%3Den%26as_sdt%3D0%2C5%26as_vis%3D1#search=%22SHAREHOLDER%20OWNERSHIP%20PRIMACY%20velasco%22

Blue Haired Lady is reverting my changes without discussion. I suggest that she discuss why she thinks my reversion is incorrect by providing appropriate cites. Also, it should be understand that peer reviewed articles are the best cites, not dictionary.com, etc.Sigiheri (talk) 21:47, 6 May 2013 (UTC)

You may certainly argue that ownership of shares of the company does not mean that shareholders effectively control the corporation. But ownership vs. control is not what you are specifically talking about here.
Two simple questions: if shareholders don't legally own the company who does? How is ownership determined legally, if not through share ownership? If you can't answer those questions, you'll need to rephrase your argument and talk about legal vs. effective ownership, or just "ownership vs. control" Smallbones(smalltalk) 22:15, 6 May 2013 (UTC)
I am providing evidence from peer reviewed law journals that ownership of shares does not imply the ownership of the corporation or its underlying assets. Answers: (1) In large widely held public corporations, there are no owners, similar to a non-for-profit. (2) ownership of the corporation is not a question the courts ever address. The law determines ownership based on the bundle of rights metaphor.Sigiheri (talk) 22:23, 6 May 2013 (UTC)
See The Modern Corporation and Private Property, 1932, by Berle and Means. There's nothing new in what you are arguing, except that you are going well beyond reality in your claims. There is a separation between ownership and control, but ownership has not been legally abolished. Smallbones(smalltalk) 15:41, 7 May 2013 (UTC)
I don't know what you mean when you say that I am "going well beyond reality in my claims". Berle and Means, who you cite, say specifically that shareholders are not legal owners. No one legally abolished ownership, so I'm not sure of your point. — Preceding unsigned comment added by Sigiheri (talkcontribs) 15:52, 7 May 2013 (UTC)
You say "Berle and Means, who you cite, say specifically that shareholders are not legal owners." I'd like to see the full citation on that, including the page number. Yes, you are being directly challenged on the "facts" you present. I've just taken a quick look at the book online and can't find that after a quick search. What I did find are things like
  • "Through it (pyramiding corporations) legal control can be effectively divorced from legal ownership." p. 71. The use of "legal ownership" referring to ownership by the shareholders.
  • (preface, not by Berle and Means) "The most enduring theme of "The modern corporation and private property" is the divorce of ownership from control of the modern corporation." (p. ix)
  • the discussion on pp. 294-295 makes the argument very clear that the legal ownership and control of the corporation have been separated, and why and how this has happened.
So when you say that there are no legal owners of the corporation, you are effectively simplifying B&M to the extent that you are denying outright their argument. There is legal ownership by the shareholders - but that control of the corporation has been divorced from this ownership.
This, of course, is just an interpretation of the law and not the law itself. I believe (though I haven't checked the law in all 50 states) that each state has laws that say the shareholders are the owners of the corporation. Can you give an example from 1 state that says somebody else is the owner?
My experience in hearing B&M type arguments is that the speaker usually ends up making one of two types of conclusions

a) that the separation of ownership and control is a bad thing and that the legal position of the shareholders should be strengthened. I generally agree with this, but it depends on the specific circumstances and arguments.

b) that, since the shareholders are not the "real owners" anyway, that their rights can or should be taken away and given to either the management or to other stakeholders such as the community, workers, customers, suppliers, etc. I generally disagree with these arguments.

May I ask which of these two arguments you favor? Smallbones(smalltalk) 17:09, 7 May 2013 (UTC)
You wrote so much and asked several questions, it's hard to address everything neatly. I will start with your last question. I don't think the conclusion I have drawn from the demise of shareholder ownership has any relevance to whether shareholders are owners or not. Therefore, I refuse to answer your last question.
Regarding your first question, Berle and Means do not state specifically: "shareholders are NOT the legal owners". That would have been too radical for the time. Even with Berle and Means calling shareholders owners, but explaining that they are now only "nominal owners", the book was suppressed and not easily published. What Berle and Means say is the following:

[The Modern Corporation has] “…divided ownership into nominal ownership and the power formerly joined to it. Thereby the corporation has changed the nature of profit-seeking enterprise.” (Berle & Means 1932 P. 7)

Here is the money quote. In pages 66-68 Berle and Means describe how shareholders now have no traditional rights and duties of owners. In the last point, quoted here, the put parentheses around "owner" to indicate that shareholders are nominal and not actually owners. "Finally, in the corporate system, the “owner” of industrial wealth is left with a mere symbol of ownership while the power, the responsibility and the substance which have been an integral part of ownership in the past are being transferred to a separate group in whose hands lies the control. (Berle & Means 1932 P. 68)

“Neither the claims of ownership nor those of control can stand against the paramount interests of the community. [...] When a convincing system of community obligations is worked out and is generally accepted, in that moment the passive property right of today must yield before the larger interests of society.” (Berle & Means 1932 p. 312)

“by surrendering control and responsibility over the active property [i.e., assets], have surrendered the right that the corporation should be operated in their sole interest…They have placed the community in a position to demand that the modern corporation serve not alone the owners or the control but all society.” (Berle and Means pp. 355-356).
“Dr. Means and I wrote thirty years ago that property was in flux, and we suggested that the classic economic logic did not apply. It applies even less in 1962 than in 1932. For the fact is that purely passive property-that is, property divorced from any responsibilities of ownership, whose value grows or diminishes in the owner's hands without any relationship to his risk- taking, work, or effort-has outlived most of the economic justification that gave it birth.” (Berle 1961, p. 448)

I have explained all of this before and it was archived. I really wish someone would un-archive these arguments so I don't have to explain the same thing every couple years. Shareholders are "nominal owners" or "owners", but they are not actual, legal owners like in an owner-run business. This fact needs to be captured in the article. As I mentioned, contemporary legal scholars show that shareholders are not the owners. In addition, German and Japanese corporations do not consider shareholders owners either. Germany has co-determination on the Boards.Sigiheri (talk) 21:06, 8 May 2013 (UTC)

Since you say "I don't think the conclusion I have drawn from the demise of shareholder ownership has any relevance to whether shareholders are owners or not. Therefore, I refuse to answer your last question.
Regarding your first question, Berle and Means do not state specifically: "shareholders are NOT the legal owners". "
I think you should realize that when you entitle this section Shareholders do not own the corporation you are going to confuse people as to what you actually mean. And since it is a legal fact - as much as anything in law can be established as fact - that the shareholders are the legal owners, you're going to convince some folks that you don't know what you're talking about. Rather I suggest that you talk about the separation of ownership and control. Smallbones(smalltalk) 04:48, 9 May 2013 (UTC)
It is NOT a "legal fact - as much as anything in law can be established as fact - that the shareholders are the legal owners." If that is the case, please cite the law or case.Sigiheri (talk) 05:03, 9 May 2013 (UTC)

We must look to what the law actually says. The Model Business Corporation Act, and the law of many states, explicitly provides that shareholders are indeed owners of the corporation.267 The Delaware General Corporation Law contains no such provision. However, the Delaware courts have understood this to be the case.268 Moreover, the Delaware Supreme Court recently has reaffirmed the traditional view as the basis for the rules regarding derivative litigation.269 Thus, the law does provide that shareholders are owners. in [1]

citing MODEL BUS.CORP.ACT ANN. ix & nn.1–2 (2009). and

MODEL BUS.CORP.ACT § 1.40(22) (2008); see also CAL.CORP.CODE § 184 (West 1990).

Smallbones(smalltalk) 12:59, 9 May 2013 (UTC)

You are quoting the conclusion of a paper I posted. I posted the paper to show that contemporary legal scholarship, against which Velasco is arguing, believes that shareholders are NOT the owners. Velasco's argument is weak and rests on footnote 166 (read what you posted and you'll see that is the case). I am not going to quote it b/c you can read it yourself. If this paper is the best you have, one that I posted, you lose the battle. This is the only paper that attempts to argue against contemporary legal scholarship and it does not do a good job. If this is your best argument, it's this paper against many more.Sigiheri (talk) 16:50, 9 May 2013 (UTC)

I saw this come up in dispute resolution. Sigiheri's points here are way off. There is a possible point that individual shareholders in some widely held companies have a hard time controlling the directors/management of some companies, but the assertions made that shareholders do not own a corporation strike at the very foundation of company law. Legacypac (talk) 09:57, 14 May 2013 (UTC)

Legacy--Where is your evidence and how is my evidence wrong? Also, if you agree that shareholders in a widely held public corporation are not owners, then we agree. If you agree that these shareholders are not owners, they comprise the majority of existing shareholders; therefore, how can we say that, in general, shareholders are owners? This is my point.Sigiheri (talk) 17:06, 14 May 2013 (UTC)

The fact that shareholders are the owners of a Corporation is so basic that there is no point arguing with you. I and others will continue to revert any changes that suggest otherwise. Legacypac (talk) 17:21, 14 May 2013 (UTC)
If it is so basic, why do so many legal scholars (e.g., Lynn Stout, Walter Lippman, Daniel Greenwood, Stephen Bainbridge) disagree with you? Have you looked at any of the cites I provided. The answer is no. As you told me, you picked this discussion up on the Resolution page and are just voicing your personal opinion. But you personal opinion is not what matter here. What matters is what is stated in PEER REVIEWED LEGAL JOURNALS. Neither you, nor the other editors have provided even one cite in this discussion, while I have provided multiple cites. Just because Legacy believes something, doesn't make it true. Review the legal scholarship and refute their position, if you can.Sigiheri (talk) 17:28, 14 May 2013 (UTC)

In addition to my business degree which included a fair amount of corporate law, and being married to a lawyer, I have extensive experience in both public and private corporations. This is not about what I believe, this is just basic reality. I just read http://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=1002&context=sulr&sei-redir=1&referer=http%3A%2F%2Fscholar.google.com%2Fscholar%3Fstart%3D30%26q%3DSHAREHOLDER%2BOWNERSHIP%2BAND%2BPRIMACY%2Bvelasco%26hl%3Den%26as_sdt%3D0%2C5%26as_vis%3D1#search=%22SHAREHOLDER%20OWNERSHIP%20PRIMACY%20velasco%22 which is one of the first sources you cite. I see nothing in that source to support your assertions - rather I see a discussion of how the complexity of the market and other players are impacting the way that the shareholders interact with the company they own. Legacypac (talk) 17:36, 14 May 2013 (UTC)

I posted that paper so that editors, like you, would have some background on the issue. Here is a quote from that paper: "Berle and Means considered the firm’s shareholders to be the corporation’s owners for the purposes of their work in The Modern Corporation and Private Property, but they also acknowledged that other theorists include bondholders, and even workers, as owners of the firm in

some important ways." This quote directly refutes your position that shareholders are the owners. Read the paper by Paddy Ireland or the one by Stout or Greenwood. I can cite quotes from the famous Walter Lippman and many others. The vast majority of legal scholarship agrees that shareholders are the owners. The only paper I know of that takes the other position is the one I posted by Velasco.Sigiheri (talk) 17:47, 14 May 2013 (UTC)

Your behavior is disruptive and based on your edit history I have no doubt that you will revert anyone who disagrees with your edits. I am taking this to the edit warring notice board. Legacypac (talk) 18:25, 14 May 2013 (UTC)
I will not revert if someone posts a cite that shows that I, and many contemporary legal scholars, are incorrect. I am here to help make Wikipedia better, how about you?Sigiheri (talk) 18:32, 14 May 2013 (UTC)
The quote "Berle and Means considered the firm’s shareholders to be the corporation’s owners for the purposes of their work in The Modern Corporation and Private Property, but they also acknowledged that other theorists include bondholders, and even workers, as owners of the firm in some important ways." This DOES NOT say that the shareholders are not the owners - it says they are the owners and cites an authority. It also suggests that bondholders and workers are ALSO owners in some important ways. Seems very clear to me. the shareholders are the owners but the employees and bondholders are also owners in some ways. I would call the bondholders and workers stakeholders, not owners, but that is not critical to the argument. Here is an example from another field of law. Everyone says that Canadian citizens are Canadians but we also acknowledge that Canadian permanent residents and long term guest workers are also Canadians in some important ways. Legacypac (talk) 21:42, 14 May 2013 (UTC)
This one article in the passage cited does not say that shareholders are owners, you are correct. It says that shareholders are owners and so are workers, bondholders, etc. That is, shareholders are the owners to the same degree workers are the owners. If you want to say that all these different constituents are just as much an owner as the shareholders, I'm okay with that. But we should not single out shareholders as the only owners. Thanks for you insight.Sigiheri (talk) 22:58, 14 May 2013 (UTC)
You posted the quote. So you agree that shareholders are owners now? I disagree that the quote says that workers and bondholders are just as much owners as shareholders are. In fact the quote says the opposite - it says in 'Some Important Ways'. Seriously, I can't go on trying to unconfuse your understanding of corporate law - it is not my job. Legacypac (talk) 23:36, 14 May 2013 (UTC)
Legacypac--No, I don't think shareholders are owners. They may considered owners of common property owned by workers, bondholders, etc., I would accept that, but it would need to be stated just like that. You're right, it would be hard for you to unconfuse my understanding of corporate law, esp. when you're no expert. Why don't you just lay off the ad hominem attacks. You're no smarter than anyone else.Sigiheri (talk) 23:48, 14 May 2013 (UTC)
Edit warring will not improve the article, and now you earned yourself a 1 week block. Hopefully someone will restore the deleted info (I will not so I do not want to go to 3RR). Legacypac (talk) 01:22, 15 May 2013 (UTC)

──────────────────────────────────────────────────────────────────────────────────────────────────── If I may point out... the reason why I phrased it this way:

In addition to legal personality, registered corporations tend to have limited liability, have shareholders who own or hold shares of a type of security commonly called stock, and are controlled by a board of directors who are normally elected or appointed by the shareholders.

...is because shareholders do not actually own a corporation from the usual legal perspective when we say "own". Sure, they own stock in the corporation, which gives them certain rights, and the chance to benefit (or not) from the rise and fall of the value of those shares, and the ability to vote in elections concerning the board of directors, but they do not own a corporation like a sole proprietor owns a company. They don't have the right to control the corporation's actions, or its assets; that power resides in the hands of the board of directors. Sure, the shareholders vote in elections that affect who sits on the board, but that's not the same thing as outright ownership. Thus, the problem up till this point is that too much focus has been placed on whether or not shareholders "own" the corporation, and what it means when we say "own", and the shades of gray inherent therein. The solution going forward is probably to adopt a phrasing which does not specify exactly who owns a corporation... instead, we should state things in plain factual terms, which are indisputable, such as "shareholders own shares in the corporation". If an editor wants to go a step further and state that someone or something "owns" the corporation itself, the WP:BURDEN should be on that editor to make the case here on the Talk Page first, with definitive sourcing. This would include both making an edit to the article to include saying "shareholders own the corporation", and making an edit to include saying "shareholders do not own the corporation". Regards, AzureCitizen (talk) 02:20, 15 May 2013 (UTC)

Photo of McDonald's[edit]

I added a photo of McDonald's to the article. It is one of the most recognizable corporations in the world and I think that it illustrates the concept well. When I think of a corporation, I usually think of McDonald's first. Zell Faze (talk) 04:49, 19 May 2013 (UTC)

Note: There was a photo request on this talk page, so if it is decided that this is not the best photo for the article, could the request be returned? Zell Faze (talk) 04:50, 19 May 2013 (UTC)
The only good thing about McDonald's as an example is geographic reach, but the problem is that it operates through franchisees at the local level.
There aren't that many corporations that reach directly into every person's life, though. A better example might be Microsoft or Facebook. Walmart is also a good example but only for industrialized countries. --Coolcaesar (talk) 03:22, 20 May 2013 (UTC)
Yes McDonald's uses franchisees, but when you buy a Big Mac you still directly benefit the big corp via royalties,food and supplies purchased from the corp etc. Also, McDonald's Corporate buys the ads you see and often owns the real estate. The photo ads to the article nicely IMO. Legacypac (talk) 04:19, 21 May 2013 (UTC)
My opinion is that it is innappropriate. It is quite a parochial sort of enterprise, the franchise system being a very specific sort of dispersed "corporation". CocaCola is more recognisable, but again doesn't demonstrate the power and scope of modern corporations. Today national governments even that of the USA are effectivel subservient to them. I'm not sure which example I would pick, BP, Exxon, Citybank, Berkshire Hathaway, Saudi Aramco, Nestle, HSBC or a corporation with not quite such size (only $163 bn revenue in 2012) like Goldman or it's a hard choice, but for me MacDonalds isn't a contestant. LookingGlass (talk) 18:50, 19 October 2013 (UTC)

Would you please separate the article into countries?[edit]

Dear Wikipedia contributors,

please, accept my most respectful greeting. I am not a specialist on legal matters and, as I tried to figure out what a corporation is, I realized it depends on the country/state/province/etc. I live in America and the differences with UK are notorious. And, despite the fact there are some lines addressing the differences, it is still very confusing for the average Joe. For this reason, I courteously ask you to split this article into countries so we, non-specialists, can understand thoroughly this subject.

Thanks so much in advance. George Rodney Maruri Game (talk) 16:22, 16 June 2013 (UTC)

What "notorious" differences? — Blue-Haired Lawyer t 18:45, 16 June 2013 (UTC)

Edit reverted - Modern corporations[edit]

Sorry Blue-Haired Lawyer but as there's no explanation for the deletion I've reverted it. I can see there might be issues but can't see a clear enough case for deletion without some explanation. Can we discuss first? LookingGlass (talk) 18:53, 19 October 2013 (UTC)

Blue-Haired Lawyer you have done a similar edit, albeit in a less draconian manner, again with no explanation here on the Talk page. The point is that on Wiki it is not ok to simply delete things without a) explaining here (on the Talk page) why AND 2) having previously asked for references (which in this case would seem more ap[propriate UNLESS you have grounds for disagreement when IF SO you should post here.) Please comply with wiki editing practices OR at least explain why you feel it is not required in this case. Thanks LookingGlass (talk) 13:14, 21 October 2013 (UTC)
"By the end of the 19th century the Sherman Act, New Jersey allowing holding companies, and mergers resulted in larger corporations with dispersed shareholders."
This appears to assume that we all know what the Sherman Act was. New Jersey is not the only place in the world to allow holding companies. I replace this with a reference to anti-trust law and holding companies.
(See The Modern Corporation and Private Property)<ref>For a comparison of the differences between the "Classic Corporation" (before 1860) and the "Modern Corporation" (after 1900), see Ted Nace, Gangs of America: The Rise of Corporate Power and the Disabling of Democracy 71 (Berrett–Koehler Publishers, Inc., San Francisco 2003).</ref>
This isn't a reference, it's a further reading and see also link.
The well-known Santa Clara County v. Southern Pacific Railroad decision began to influence policymaking and the modern corporate era had begun.
Again readers are supposed to know what this was. I replaced it with reference to corporations gaining more legal rights.
"The 20th century saw a proliferation of enabling law across the world,..."
A what now? No explanation is given for what an enabling law is. The only enabling law I had previously heard was the one passed in Germany giving absolute power to Hitler.
"which helped to drive economic booms in many countries before and after World War I. Starting in the 1980s, many countries with large state-owned corporations moved toward privatization, the selling of publicly owned (or 'nationalised') services and enterprises to corporations. Deregulation (reducing the regulation of corporate activity) often accompanied privatization as part of a laissez-faire policy."
I kept this.
"Another major postwar shift was toward the development of conglomerates, in which large corporations purchased smaller corporations to expand their industrial base."
Which war? Weren't we just talking about the 1980s? I put this in order and specified the First World War.
"Japanese firms developed a horizontal conglomeration model, the keiretsu, which was later duplicated in other countries as well.<ref>Apple</ref>"
Another example of a great reference. Apple is clearly not an example of keiretsu (apple is actually an example for vertical integration) and the point is altogether for too observe for a general article on the topic so I deleted it.
I hardly need to seek your approval for every single edit with copious explanations. I deleted it because it was self-evidently poorly written. I rewrote it for the same reason. I left edit summaries. — Blue-Haired Lawyer t 14:15, 21 October 2013 (UTC)
You're making this very hard. Let's start with your ending. You are correct. You do not need my approval. What I think you do need to do though is to adhere to wikipedia edit guidelines. That is what I am drawing your attention to, and what I am asking you to comply with.
I am not going to comment on each of your edits and reasonings, as they seem in the main to be very similar to one another. Instead two examples should suffice.
You take exception to the citing of the Sherman Act, saying "This appears to assume that we all know what the Sherman Act was", despite it being given in the form of an internal reference. If you felt that it required expansion or clarification, then you could have provided that. You have not shown nor attempted to show that the reference to the Sherman Act is not relevant or helpful. Further, your final edit could easily have been merged with that which you deleted, rather than merely substituted for it, and the article would thereby have been improved rather than impoverished.
You think your edits better. That is your opinion. You are entitled to it. What you are not entitled to do by virtue of your opinion is to simply delete other editors work because, in your opinion, it is inadequate. You state that the editor should have included their reference as "see also/further reading" as it was not specific enough to form a verifiable citation. You chose to delete the passgae. You didn't add it to the further reading section, and while there is an inline tag to request a more specific citation you chose not to use it.
IMO that should suffice, but if it does not, and you are deletermined to engage in this form of "high-minded vandalism", there is little I can do to stop you. I am not going to engage in an edit war.
It's up to you whether you comply with wikipedia protocols etc or not. I have drawn your attention to the issues. There is pleanty of guidance on wiki to help you. At least I have managed to get you to give some account of your actions here on the Talk page. The rest is up to you. LookingGlass (talk) 13:17, 22 October 2013 (UTC)

A handful of corporations control food[edit]

Food, Inc said that there is a handful(!) of corporations controlling our food system, such as McDonald's. Do you think that can be added here? Only a handful, maybe as a criticism? Hillmon7500 (talk) 04:44, 13 April 2014 (UTC)

recent SCOTUS Hobby Lobby decision[edit]

This decision has left me thoroughly confused. It was always been my understanding that the people who own a corporation do not have the rights & responsibilities of the people owning an unincorporated business. The laws that protect corporate owners from direct financial responsibility also block them from letting their personal beliefs become corporate policy. This needs a thorough explanation and analysis. WilliamSommerwerck (talk) 19:30, 1 July 2014 (UTC)

  1. ^ 28 U.S. Code §3002, 15 A: "'United States'” means […] a Federal corporation […]".