The new site Objectivist Answers has really taken off since its launch, now with over 190 questions, more than 400 answers, and countless comments and votes from a steady stream of visitors!
One of the questions is asked by “ryankrause“:
Do Corporations Have Rights?
There has been some controversy lately over the rights of corporations (freedom of speech, etc.). From an Objectivist perspective, what–if any–are the rights of corporations? Do they simply share the individual rights of their shareholders, or since they are technically legal creations, should they have fewer rights than human beings?
Leaving aside the issue of their current legal status and dealing with principles, corporations are nothing more than means by which individuals get together and pool resources to make a single integrated system of resources to achieve one common objective. The rights of the corporation are whatever the rights possessed by the individual as they choose to delegate to it, and are of equal validity as any individual rights for that reason.
In regards to limited liability, the principle itself is sound but the law surrounding it today is wrong. The law today says corporations really are separate entities with legal personhood, which law is then used to pretend that incorporation is only a government privilege and that corporations are obliged to serve government ends. The law as it stands then leads to a variety of injustices, which have themselves lead to further bad adjustments to already bad law (another example of controls breeding controls).
If the law were written properly limited liability would be legally recognised for what it actually is: a derivative property right and which gives the superficial appearance of the corporation being a separate entity for the purposes of issuing stock, borrowing money, and similar financial activities. Everything valid about limited liability can be traced back to individuals’ rights to property and freedom of contract, including other derivatives such as the right to freedom of principal-and-agent agreements. Proper law relating to limited liability would just recognise that people would use these same types of contractual arrangements again and again, so would integrate the practice into a few concepts (the corporation and a few variants) and develop an integrated body of law to match. That law would also then not let bad people perpetrate the fraudulent behaviour that law imparting legal-personhood to corporations shields them to do.
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