Key Takeaways

  • Corporate personhood is the legal concept that corporations possess some constitutional rights similar to individuals, but not all.
  • It grants businesses protections under key amendments, such as the 1st, 4th, 5th, and 14th Amendments, ensuring due process and equal treatment under law.
  • The Citizens United case expanded corporate 1st Amendment rights, igniting major debate over corporate influence in politics.
  • Arguments for corporate personhood include economic growth, global collaboration, and legal consistency.
  • Critics argue corporations lack morality, cannot vote or feel, and should not have influence equivalent to natural persons.
  • The legal recognition of corporate personhood has evolved through a long history of court rulings and political developments dating back to the 19th century.

What is Corporate Personhood?

Corporations have some of the same rights as people. This is known as corporate personhood. It is the idea that a corporation has its own rights. Corporate personhood has existed much longer than many people realize. 

Corporate personhood is not just for large companies. As long as a business is incorporated, it  can benefit from corporate personhood. Organizations that benefit from corporate personhood can include:

  • Large businesses
  • Small businesses
  • Churches
  • For-profit organizations

Because it bought land, the Catholic Church is one of the earliest examples of corporate personhood.

Many people are against the idea of corporate personhood. In their opinion, companies are not people and do not deserve the same rights as a regular person. However, this legal designation does not give a business the same rights as a natural person. Corporate personhood protects corporations from unfair treatment by the government. These protections are important for corporations to operate successfully.

People who are against corporate personhood claim that the legal concept ignores an important difference between businesses and people. The argument is that people are created by God and thus have God-given rights. Businesses are not, so opponents say they do not deserve the same status as a regular person.

Opponents also argue that unlimited corporate political spending gives corporations a stronger voice than regular people. It allows them to control elections, pressure candidates, and is a de-stabilizing influence on the country's political system.

Although corporations have certain rights, they are not considered full persons under the law.

The Importance of Corporate Personhood

Although its opponents may not realize it, corporate personhood is extremely important and serves as one of the main preventative measures against government overreach. Generally speaking, corporations are entitled to 1st, 4th, 5th, and 14th Amendment protections. While the main point of contention when it comes to personhood is the 1st Amendment rights granted by the Citizens United ruling, the more important protections are provided by the other amendments.

For example, the 14th Amendment provides equal protection under the law. This is important for corporations because it prevents state governments or other jurisdictions from passing legislation that unduly burdens a corporation while not affecting other citizens.

Equally as important to corporate personhood is the 4th Amendment, which grants protection from unreasonable searches and seizures. Without the protection of the 4th Amendment, corporations could be raided by the government and have their assets seized with no legal recourse. Fourth Amendment protections were extended to corporations in the Los Angeles v. Patel ruling, which involved police attempting to search a hotel guest registry.

Also, due to 5th Amendment protections granted to corporations, the government cannot strip them of earnings or profits thanks to the "taking" clause of this amendment. This right was granted to corporations in the ruling of Horne v. Department of Agriculture. In this case, the Department of Agriculture tried to force a small grape grower to set aside a percentage of crop yield to be redistributed by the government.

Prevention of unfair treatment by the government at any level is the most important reason for the existence of corporate personhood.

Key Constitutional Amendments Involved in Corporate Personhood

Corporate personhood draws from several constitutional amendments. While the 1st Amendment is the most contested—especially following the Citizens United ruling—other amendments form the backbone of corporate rights:

  • 1st Amendment: Grants corporations limited speech rights, especially in the context of political and commercial expression.
  • 4th Amendment: Protects corporations against unreasonable government searches and seizures, extended in cases like Los Angeles v. Patel.
  • 5th Amendment: Prevents the government from taking corporate property without due process, as established in Horne v. Department of Agriculture.
  • 14th Amendment: Offers equal protection under the law, initially designed to protect newly freed slaves but later applied to corporations in Santa Clara County v. Southern Pacific Railroad Co.

These protections are not identical to those enjoyed by individuals but serve to ensure businesses are not arbitrarily targeted by government action.

Arguments for Corporate Personhood

There are strong arguments in favor of personhood. Even if they are limited, corporations need some rights to exist. Without these rights, few businesses would succeed.

Some of the best arguments for personhood include:

  • World Peace: This idea enables businesses in different countries to work together. When countries are tied together, arguments aren't as common. It also means that problems between countries are fixed much more quickly. Personhood leads to world peace.
  • Competition: Personhood protects corporations from liability. This allows them to take risks and expand. Without this protection, it would be difficult for corporations to compete in the marketplace. Less competition hurts both consumers and corporations, which is why personhood is important.
  • Global Stability: Personhood allows for multinational corporations. This means one company can operate in many different countries. The protections of personhood defend company owners from liability, which encourages them to expand internationally. Multinational corporations increase economic bonds between countries and leads to increased global stability.
  • Legal Distinction: Personhood is a legal distinction. It is used for both corporations and people. This designation is a way to define bestow rights, outline legal entitities, and define liability. Because personhood is only used as a legal distinction, and not a value judgment, it does not put corporations on the same level as natural people.
  • People Create Corporations: Regular people create and run corporations. Protecting corporations means protecting the people who created them. Personhood is important because it benefits the people who start and run businesses.
  • It's in the Dictionary: The dictionary defines corporations as people in some cases.
  • It's a Legal Definition: Personhood is a legal definition. It does not make businesses equal or more valuable than regular people. The only reason for personhood is to protect businesses. Personhood is not meant to harm people. Without personhood, a business could be unfairly harmed by laws or regulations.
  • Personhood Protects People: A business is made up of its people. Personhood protects both a business and the people who work for it. If a business does something illegal, personhood makes sure the people who work for the business are not harmed. Personhood also makes it easier for a small business to compete with larger businesses. It evens the playing field for everyone involved in business.
  • Taking Part in a Business: To work at a business, you have to give up some of your rights. However, giving up these rights often leads to big benefits in the future. If personhood did not exist, you would not be able to give up these rights and take part in a business. Personhood enables businesses and employees to work together to succeed. Personhood leads to opportunity.

Arguments Against Corporate Personhood

Many people disagree with personhood. They don't feel businesses should have the same rights as people. However, getting rid of personhood would be very difficult. It would also be harmful to businesses everywhere. People against personhood don't feel it's fair that a wealthy business has the same rights as its workers. They feel like personhood gives businesses more power than real people.

The best arguments against personhood are:

  • Businesses Are Not Real: The main reason to not have personhood is that businesses do not exist in reality. A business mostly exists on paper. Giving a business the same rights as people doesn't make sense because they are not people in any real way.
  • Lack of Morality: Those against corporate personhood argue that corporations cannot be people because they lack morality. Morality is key to the social compact, and without morality a corporation cannot fully join the social compact. Since a corporation does not have morality, and is only motivated by profit, it does not deserve the rights of a real person.
  • Only People Deserve Rights: A business needs some rights to be able to succeed. However, it does not deserve the same rights as a real person. If a business is given personhood, it means it has more power than a real person. Many people believe this is unfair because a business cannot be harmed in the same way a person can. Rights belong to people, not businesses.
  • Personhood is for Citizens: A business cannot be a citizen of a country. In fact, most businesses work in many countries. If a business can't be a citizen, then it does not deserve personhood. Rights are supposed to protect a citizen of a country. Citizens can vote. Businesses are not allowed to vote. This means they are not citizens and do not deserve rights.
  • Businesses Are Not Alive: A big part of personhood is feelings. Businesses have no feelings because they are not people. A business can't live. It can't die. Businesses do not feel love, get married, or have children. If a business is not alive, then it is not a person and does not deserve personhood.
  • Businesses Only Want to Make Money: Real people know the difference between right and wrong. They understand why it's wrong to hurt another person. Businesses are not people, so they don't know the difference between right and wrong. The only thing a business cares about is making money. This can end up hurting regular people. Not knowing right from wrong means that a business should not be given personhood.

Real-World Impacts of Corporate Personhood

The recognition of corporate personhood has real-world effects across political, legal, and social spheres:

  • Campaign Financing: Following Citizens United v. FEC, corporations can spend unlimited amounts on independent political expenditures, raising concerns over disproportionate influence in elections.
  • Religious Rights: In Burwell v. Hobby Lobby Stores, Inc., the Supreme Court allowed closely held corporations to deny contraception coverage based on religious objections—extending 1st Amendment religious protections.
  • Consumer Privacy: Corporate personhood has shaped how businesses protect (and use) consumer data. Some courts have limited how government agencies can compel disclosure without warrants.
  • Legal Accountability: While personhood grants rights, it also imposes responsibilities. Corporations can be sued, fined, and held criminally liable, though critics argue this accountability is often insufficient compared to the power these entities wield.

The History of Corporate Personhood

Before the Constitution, the United States was governed by British Common Law (BCL). BCL defined corporations as "artificial persons." Artificial personhood allowed corporations to:

  • Pay taxes
  • Pay employees
  • Sign contracts
  • Sue and be sued
  • Collect dues

Being an artificial person meant that corporations did not have legal rights. They only had privileges that could be taken at any time.

The history of corporate personhood starts with the Constitution. Important events that led to full corporate personhood include:

  • 1791: The First Amendment is ratified.
  • 1819: In Dartmouth v. Woodward, Chief Justice John Marshall states that corporations do not deserve Constitutional protections.
  • 1870s–1890s: The Pendleton Act limits public spending on political campaigns. William McKinley decides to seek corporate donations in 1896 and 1900.
  • 1886: In the Santa Clara v. Southern Pacific Railroad Co. decision, corporations are given limited 14th Amendment Rights.
  • 1897: Corporations are given full 14th Amendment rights. They also receive some 5th Amendment protections.
  • 1905: Lochner v. New York strikes down a law that attempted to limit worker hours. This ruling stood for 30 years.
  • 1906: The Hale v. Henkel case gives 4th Amendment Rights to corporations. 5th Amendment rights are still limited.
  • 1907: The Tillman Act prevents direct political donations from corporations. The Act includes labor unions in 1947.
  • 1937: The Lochner decision is overturned, and many regulations are passed that limit corporate power in favor of worker's' rights.

Corporate personhood stalled over the next 30 years. The modern push for corporate rights started in 1971:

  • 1971: The Federal Election Campaign Act (FECA) strengthens campaign finance laws.
  • 1974: After the Watergate scandal, FECA is improved. It now includes limits on campaign spending and donations. The Federal Election Commission (FEC) is founded.
  • 1976: Buckley v. Valeo decides that political advertising is free speech. Direct contributions are still illegal. Virgina Board of Pharmacy v. Virginia Citizens Consumer Council gives 1st Amendment rights to some commercial speech.
  • 1978: Bellotti v. First National Bank of Boston removes a ban on for-profit corporations spending money for political referendums. Surprise OSHA inspections are ruled to violate the 4th Amendment.
  • 1980s: The Central Gas & Electric Corp. v. Public Service Commission decision establishes the four-part corporate speech test. A portion of FECA is struck down. Corporate spending on nonprofit organizations is now unlimited.
  • 1986: Pacific Gas & Electric Co. v. Public Utility Commission of California gives corporations the right to "negative speech."
  • 1990: Austin v. Michigan Chamber of Commerce upholds a spending ban. Non-media companies still can't spend on political campaigns.
  • 2002: The Bipartisan Campaign Finance Reform Act (BCRA) is signed. Also known as McCain-Feingold, the BCRA puts limits on "soft money."
  • 2003: The Austin decision is upheld, and a challenge to the BCRA is rejected.
  • 2007: Federal Election Commission v. Wisconsin Right to Life strikes down a portion of the BCRA's restrictions on political advertising. Ads that mention candidates without advocating for or against them in the period leading up to elections are now legal.
  • 2008: Davis vs. Federal Election Commission further weakens the BCRA. Individual campaign contributions may now be higher. Citizens United is prevented from showing a political ad. It decides to sue the FEC.
  • 2009-2010: The Supreme Court hears arguments in Citizens United v. Federal Election Commission. The Court rules in favor of Citizens United. Limits on corporate political spending are now unconstitutional. Speechnow.org v. Federal Election Commission allows unlimited contributions to independent expenditure PACs.
  • 2011: Sorrell v. IMS Health, Inc. strikes down a ban on doctord' prescribing habits being used for marketing. Arizona Free Enterprise Club v. Bennett removes a state-level public financing system. The system is found to be unfair to non-participatory candidates.

Two recent cases are important to corporate personhood. In Sebelius v. Hobby Lobby Stores, corporations are given freedom of religion under the 1st Amendment. In McCutcheon v. Federal Election Commission, limits on individual aggregate contributions were struck down.

Landmark Legal Doctrines and Precedents

Several legal doctrines and cases have defined the modern understanding of corporate personhood:

  • Doctrine of Implied Rights: Even when not explicitly stated, courts have interpreted the Constitution to imply certain protections for corporations.
  • "Aggregate of Individuals" Theory: Some courts have justified personhood by treating corporations as collections of individual rights-holders.
  • Citizens United v. FEC (2010): Arguably the most influential modern case, this ruling declared that corporate funding of independent political broadcasts in elections cannot be limited under the First Amendment.
  • Burwell v. Hobby Lobby (2014): Established that for-profit corporations can hold religious beliefs under the Religious Freedom Restoration Act.

These and related doctrines have shaped the evolving balance between business autonomy and public accountability.

Effects of Revoking Corporate Personhood

If corporate personhood were revoked, corporations would revert to the status of artificial persons. In this form, they would lose many of the constitutional protections currently afforded to them, including those under the 1st, 4th, 5th, and 14th Amendments. Their rights would instead be considered revocable privileges, leaving them vulnerable to unfair treatment by state and federal governments. This change could hinder fair competition and reduce a corporation’s ability to defend itself in legal or regulatory disputes, ultimately making it more difficult for businesses to operate and thrive.

Impact on Small Businesses

A repeal of corporate personhood would not only affect large corporations—it would significantly impact small businesses as well. Any business that is legally incorporated benefits from the rights associated with corporate personhood. Without these protections, small businesses would be less able to compete with larger, more resource-rich companies and would be disproportionately affected by regulatory or legislative measures targeting corporate entities. This imbalance could stifle entrepreneurship and economic diversity.

Can Corporate Personhood Be Limited?

Rather than being entirely repealed, corporate personhood could be limited in ways that strike a balance between protecting businesses and curbing undue influence. For instance, it’s possible to uphold due process and property protections while restricting political expenditures by corporations. However, implementing these kinds of limitations would require amending the Constitution, a process that is both complex and politically challenging.

Do Unions Have Corporate Personhood?

Unions are currently classified as artificial persons and do not enjoy corporate personhood. They have not historically sought recognition under this legal doctrine and therefore have not been granted its full set of rights. While unions function as legal entities and can take part in some aspects of legal and political activity, they do not have the same constitutional protections as incorporated businesses. That said, the legal status of unions could evolve in the future depending on legislative or judicial developments.

Incorporate with Legal Help

Corporate personhood is one of the most complex political and legal issues there is, and it's likely to get more complex as corporations are granted additional rights. As corporate rights are expanded, incorporating your business becomes an increasingly useful tool. If you're interested in incorporating your business and taking full advantage of corporate personhood, you can find a knowledgeable attorney by searching the UpCounsel marketplace.

Frequently Asked Questions

1. What rights do corporations have under corporate personhood? Corporations have limited rights under the 1st, 4th, 5th, and 14th Amendments, such as freedom of speech, protection against unlawful searches, and due process.

2. Is corporate personhood the same as being a natural person? No. Corporations are legal entities, not human beings. They do not have all the rights of natural persons, such as voting or protection against self-incrimination.

3. How did corporate personhood evolve in the U.S.? Corporate personhood evolved through judicial decisions, beginning with Santa Clara v. Southern Pacific and expanding through cases like Citizens United v. FEC and Hobby Lobby.

4. Can corporate personhood be limited without full repeal? Yes. Lawmakers could restrict certain rights, such as political contributions, through constitutional amendments or statutory limitations. However, these changes are difficult to implement.

5. Does corporate personhood apply to nonprofits and unions? Nonprofits and unions are considered artificial persons and may receive some protections, but they do not automatically enjoy the full extent of corporate personhood unless incorporated and recognized under specific statutes.

Many of the attorneys you'll find on UpCounsel have experience in the corporate world and will fully understand the rights granted by corporate personhood and the requirements to incorporate your business. Learn more about UpCounsel's superior pricing. Be sure to register so you can post your legal need today.