A corporation can sign a contract, own property, sue in court, and even claim constitutional rights. But what is it, exactly? The answer depends entirely on which legal system you ask.

Some jurisdictions treat a corporation as a distinct legal person—an entity with its own will, separate from the humans who own or operate it. Others see it as little more than a convenient label for a group of people acting together. This distinction might sound like academic hair-splitting, but it shapes everything from who pays when things go wrong to whether a company can claim freedom of speech.

Across common law, civil law, and hybrid traditions, the legal personality of the corporation is one of the most consequential fictions ever devised. Understanding how different systems construct that fiction reveals deep assumptions about liability, accountability, and the relationship between capital and the state.

At the heart of corporate law lies a fundamental question: is a corporation a thing in itself, or merely a shorthand for the people behind it? The entity theory, dominant in most civil law traditions and deeply embedded in Anglo-American corporate law since the late nineteenth century, treats the corporation as a separate legal person. It can hold assets, incur debts, and bear obligations entirely independent of its shareholders. The company's property is not the shareholders' property. The company's liabilities are not the shareholders' liabilities.

The aggregate theory, by contrast, treats the corporation as fundamentally a partnership-like arrangement—a collection of individuals who have chosen to act together under a shared name. This view has older roots and still exerts influence in certain contexts, particularly in smaller or closely held companies. Under aggregate thinking, the corporation's interests are really the interests of its members, and the boundaries between the two are more porous.

The practical consequences are significant. Entity theory provides the conceptual foundation for limited liability: because the corporation is a separate person, its debts belong to it alone. In Germany's GmbH structure and France's société à responsabilité limitée, entity separateness is codified with particular clarity. In contrast, jurisdictions influenced by aggregate thinking—or those that apply it selectively to certain company forms—may impose broader personal obligations on owners, particularly in family businesses or single-shareholder companies.

Japan offers an instructive middle path. Its Companies Act recognizes robust corporate separateness, yet Japanese commercial culture and judicial practice often treat the interests of employees and other stakeholders as partially constitutive of the corporate identity itself. The entity exists, but its personality is understood more communally than in, say, Delaware. The theory a system adopts isn't just abstract—it determines who benefits and who bears risk when the corporation acts.

Takeaway

Whether a legal system sees a corporation as a separate being or a group in disguise determines who keeps the profits and who absorbs the losses. The abstraction has concrete winners and losers.

If entity theory builds a wall between a corporation and its shareholders, veil piercing is the mechanism for knocking it down. Every major legal system allows courts to disregard corporate separateness in some circumstances—but the threshold varies dramatically. These differences reveal how much each system truly trusts the fiction it has created.

In the United States, veil piercing is relatively common but notoriously unpredictable. Courts apply multi-factor tests examining whether the corporation was inadequately capitalized, whether corporate formalities were observed, and whether the entity was used as a mere alter ego of its owner. The standard is fact-intensive and jurisdiction-specific—a California court and a New York court may reach opposite conclusions on similar facts. The UK takes a markedly more conservative approach. English courts have historically been reluctant to pierce the veil, treating corporate separateness as near-sacrosanct since Salomon v Salomon & Co in 1897.

Civil law systems often address the same problem through different doctrinal tools. Germany's Durchgriffshaftung doctrine permits piercing but applies it sparingly, typically requiring evidence of deliberate abuse—such as commingling of assets or using the entity to perpetrate fraud. French courts, meanwhile, rely more heavily on concepts like confusion de patrimoines (confusion of assets) and fictivité (sham entities), which focus less on shareholder misconduct and more on whether the corporate form has any genuine substance.

China presents a particularly dynamic case. Its 2005 Company Law explicitly codified veil piercing for the first time, and Chinese courts have applied it with increasing frequency, especially against sole shareholders who fail to demonstrate separation of personal and corporate assets. The willingness to pierce reflects a broader regulatory impulse: in rapidly developing economies, the corporate form can be exploited before institutional safeguards mature. Each system's piercing standard is ultimately a statement about how much autonomy it grants to capital.

Takeaway

The ease with which a legal system will look behind the corporate form tells you something important: how much that society trusts private actors to use powerful legal fictions responsibly.

Perhaps no dimension of corporate personhood generates more controversy than the question of constitutional rights. If a corporation is a legal person, does it deserve the rights that constitutions guarantee to persons? The world's legal systems give strikingly different answers, and those answers reshape political landscapes.

The United States stands at one extreme. Through a series of Supreme Court decisions—most notably Citizens United v. FEC (2010)—American law has extended First Amendment speech protections, Fourth Amendment search protections, and due process rights to corporations. The logic flows directly from entity theory: if the corporation is a person, it has personhood rights. Critics argue this conflates a legal convenience with a moral reality, granting powerful economic actors rights designed to protect vulnerable human beings.

Most European systems take a more measured approach. The European Court of Human Rights recognizes that corporations can invoke certain Convention rights—particularly property protections under Protocol 1 and fair trial guarantees under Article 6—but does so with explicit awareness that corporate claimants are different from natural persons. German constitutional law protects corporate rights under the Grundgesetz only to the extent those rights are "applicable by their nature" to legal persons, a formulation that invites case-by-case calibration rather than blanket extension.

In much of Asia and Latin America, the question is framed more cautiously still. India's Supreme Court has recognized limited fundamental rights for corporations—primarily to property and equal protection—while excluding rights tied to personal dignity or bodily autonomy. Brazil's constitution similarly distinguishes between rights inherent to human dignity and those that serve economic function. The pattern across systems is clear: the further a right is from economic activity and the closer it is to human dignity, the less likely a jurisdiction is to extend it to a corporate entity. How each system draws that line says as much about its conception of personhood as about its conception of corporations.

Takeaway

The rights a society extends to corporations reveal what it believes personhood truly means—and whether it sees constitutional protections as grounded in human dignity or in the logic of legal status alone.

Corporate personhood is not a single idea but a family of related fictions, each shaped by the legal culture that invented it. The same word—person—does radically different work in Delaware, Frankfurt, Beijing, and Mumbai.

What unites these systems is a shared recognition that economic complexity demands some form of collective legal identity. What divides them is how much power, autonomy, and dignity they attach to that identity once created.

For anyone interested in legal reform, the comparative landscape offers both caution and inspiration. There is no natural or inevitable way to construct the corporate person. Every choice reflects values—and every choice can be made differently.