Conceptions of Legal Entities

Conceptions of Legal Entities

Professor Reinier Kraakman
Spring 2019 course
Th 5:00pm - 7:00pm in WCC Room 3012
2 classroom credits

Prerequisites: There are no prerequisites for this course although some familiarity with corporate law is assumed.

Exam Type: No Exam
Grading will be based on reaction memos and class participation.

This course explores disparate conceptions of legally entities in private law, with an emphasis on for-profit entities such as corporations. Readings range from law-and-economics constructions of legal entities to traditional jurisprudential views, including the identification of corporations as "persons" in constitutional law. The question throughout is: why should the law accord legal personality to for-profit firms? Ancient Roman law made little use of fictional legal entities in commercial law. What functions do legal entities serve in modern law? For example, do they simplify transactions, or facilitate raising capital for large enterprises by securitizing interests in ongoing businesses? Do they allow lawmakers to regulate collective actors that would otherwise live in the wild? Or do they do all of the above? In addition, how should we resolve the conceptual puzzles that legal entities pose? How can they be criminally liable if no real person among their agents has criminal intent? Lawyers sometimes say that corporations are fictions; management consultants sometimes depict them as unruly machines. The difference turns partly on definitions. But not entirely. How did the "real entity" theory enter American jurisprudence to compete with the venerable view that corporate "personhood" is a privilege conferred by the state, or its polar opposite, the view that the corporation is a species of private ordering, a "nexus of contracts" in one phrasing?

Subject Areas: Business Organization, Commercial Law, and Finance