There are three main theories of the corporation as a legal entity: the concession theory, the real entity theory, and the aggregate (contractarian) theory. Once the most prominent of the three, the concession theory fell out of favor long ago but seems to be making a comeback, due in large part to Senator Elizabeth Warren and her Accountable Capitalism Act (the “ACA”).
The Rise and Fall of the Concession Theory
The concession theory holds that corporate personhood and associated privileges are granted to corporations by the state where they are incorporated. In other words, the theory posits that it … Read more