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  1. #1
    Join Date
    Apr 2011

    Default Corporate Personhood, Ownership Rights, and Conflicts of Interest

    My question involves business law in the state of: United States

    I am a college student and I am currently completing come coursework in which I have chosen to look into the evolution of corporate law and its social impact. I have learned that the principle of person-hood permits corporations to own property nonessential or unrelated to its primary economic activities, as they were not while governed by charters. My inquiry is about whether or not it is legal or even possible for this to allow for certain conflicts of interest.

    Real life example of a scenario where this would relevant: an individual is a contract farmer for a corporation. The corporation communicates to the this individual their preference that they adopt a specific technology in their production and does not offer any financial assistance for them to do so.

    Based on my current understanding of what person-hood enables a corporation to do, one is permitted to own property that can include other corporations and companies. Thus, it would seem that a contracting corporation would have the right to also own the producer of the hypothetical technology. Now obviously something is amiss here if that is ture. Is this possible/legal? To me this is blatant conflict of interest, but it seems that the current structure of things would permit it. Am I at all correct in any of this?

    EDIT: Also, is it possible for a corporation as an entity to obtain a patent sans person-hood?

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Corporate Personhood, Ownership Rights, and Conflicts of Interest

    So a corporation contracts with a farmer to, I guess, grow crops for the benefit of the corporation. The corporation says, "We would prefer that you use X technology," but offers no additional compensation. There's nothing wrong with that. Nor would there be anything wrong with requiring the use of the technology from any farmers bidding to grow the crops. Did you have something more than that in mind?

    What is your last question supposed to mean?

  3. #3
    Join Date
    Apr 2011

    Default Re: Corporate Personhood, Ownership Rights, and Conflicts of Interest

    Quote Quoting Mr. Knowitall
    View Post
    Did you have something more than that in mind?

    What is your last question supposed to mean?
    A) Quite. The farmer scenario is hypothetical (although based in real life events) and meant only to illustrate a situation in which the subjects of my actual questions, which are related to the legal principle of corporate person-hood and its implications, are relevant. Let me state it more directly : can a corporation, which can own other businesses because it is considered as person and thus is entitled to property, exercise that right in such a way as would be illustrated in the prior scenario: Example Corp has a contract with a given farmer, which it will leverage to incline that individual to purchase a technology developed and produced by a subsidy of that same corporation, while making it implicit that the contracts continuation hinges on the adoption of that tech. Does this type of scenario run afoul of any particular laws? I am particularly concerned with this type of scenario because I believe that it illustrates coercive behavior that the corporation has less incentive to engage in if it is not granted "person-hood" and as an entity cannot own property such as other corporations or businesses. Relate this scenario to vertical integration practices and you'll probably see what I'm getting at.

    B) Well, it means exactly what its says. If we don't operate under the legal principle that a corporation is a "person" with the same rights that are extended to you and I in recognition of our person-hood, can it obtain patents of any sort as a corporation i.e. patent for X is held by Example Corp rather than individual Y. Make sense?

    Feel free to correct any misconceptions I may be operating under, everything that I have stated thus far is "to the best of my understanding". But I'm at a loss as to how I could clarify this anymore when its original expression was reasonably clear to being with.

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