3 ms·

"Nor does the law require, as many believe, that executives and directors owe a special fiduciary duty to shareholders. The fiduciary duty, in fact, is owed sim

"Nor does the law require, as many believe, that executives and directors owe a special fiduciary duty to shareholders. The fiduciary duty, in fact, is owed simply to the corporation, which is owned by no one, just as you and I are owned by no one — we are all “persons” in the eyes of the law. Shareholders, however, have a contractual claim to the “residual value” of the corporation once all its other obligations have been satisfied — and even then directors are given wide latitude to make whatever use of that residual value they choose, as long they’re not stealing it for themselves."

throwawayapples 4y ago
"the corporation, which is owned by no one" Conflating the legal fiction of the personhood of a corporation with the fact that it cannot be owned, or worse, has no owners, is not something I'd expect to hear from a WaPo journalist. (Upon further research, the author was neither an attorney or an economist, but did win the Pulitzer, and has since passed on: https://en.wikipedia.org/wiki/Steven_Pearlstein https://en.wikipedia.org/wiki/Steven_Pearlstein ) However, I still take issue with the statement that a corporation is not "owned" by the shareholders. As a matter of law, a corporation is owned by the shareholders.
- bell-cot 4y ago
  The 13th Amendment begs to disagree. /s
- throw0101c 4y ago
  > However, I still take issue with the statement that a corporation is not "owned" by the shareholders. As a matter of law, a corporation is owned by the shareholders. As a matter of law a corporation is not: > Simply and clearly, the corporation owns its own assets. In the simplest terms, a private company became a public company when the original owners gave up ownership. In turn, they received a stock certificate outlining certain rights to profits and other privileges. What they got, again, was a stock certificate not a certificate of ownership. The word “ownership” does not appear in that document. Additionally, while the shareholders are entitled to a portion of profits, as shareholders, they are no longer exposed to liabilities of the companies in which they hold shares. * https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-shareholders-are-not-the-owners-of-a-corporation/ https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-s... > This paper demonstrates that shareholder ownership, a sacred cow of business, is a myth. According to our legal system, shareholders do not own the Modern Corporation itself, nor do they own the corporate assets or profits. […] * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1464148 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1464148 See also: Paddy Ireland (1999), 'Company Law and the Myth of Shareholder Ownership', Modern Law Review, 62, pp. 32-57.

throwawayapples 4y ago

"the corporation, which is owned by no one" Conflating the legal fiction of the personhood of a corporation with the fact that it cannot be owned, or worse, has no owners, is not something I'd expect to hear from a WaPo journalist. (Upon further research, the author was neither an attorney or an economist, but did win the Pulitzer, and has since passed on: https://en.wikipedia.org/wiki/Steven_Pearlstein https://en.wikipedia.org/wiki/Steven_Pearlstein ) However, I still take issue with the statement that a corporation is not "owned" by the shareholders. As a matter of law, a corporation is owned by the shareholders.

bell-cot 4y ago
The 13th Amendment begs to disagree. /s
throw0101c 4y ago
> However, I still take issue with the statement that a corporation is not "owned" by the shareholders. As a matter of law, a corporation is owned by the shareholders. As a matter of law a corporation is not: > Simply and clearly, the corporation owns its own assets. In the simplest terms, a private company became a public company when the original owners gave up ownership. In turn, they received a stock certificate outlining certain rights to profits and other privileges. What they got, again, was a stock certificate not a certificate of ownership. The word “ownership” does not appear in that document. Additionally, while the shareholders are entitled to a portion of profits, as shareholders, they are no longer exposed to liabilities of the companies in which they hold shares. * https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-shareholders-are-not-the-owners-of-a-corporation/ https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-s... > This paper demonstrates that shareholder ownership, a sacred cow of business, is a myth. According to our legal system, shareholders do not own the Modern Corporation itself, nor do they own the corporate assets or profits. […] * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1464148 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1464148 See also: Paddy Ireland (1999), 'Company Law and the Myth of Shareholder Ownership', Modern Law Review, 62, pp. 32-57.