The argument set out in this article is that the modern company is a creature of the state, with corporate legal personality derived from the state through the process of incorporation. Once incorporation takes place a legal person is created. Status as a legal person is different to the type of sociological personality that a group of individuals may develop organically that is recognised by the law. Also status as a legal person means corporate legal personality is more significant than just a shortcut mechanism to describe a collective of individuals or a set of characteristics. It is argued that the modern company is a nexus for contracts; a legal entity that is a legal person that derives its legal personality from the state. Far from being a ‘convenient heuristic formula’, corporate legal personality attaching to the nexus or entity separate from shareholders and all other corporate participants is the defining characteristic of the modern company.
Watson, Susan Mary, The Corporate Legal Person (January 12, 2018). Journal of Corporate Law Studies, January 2018.