The law speaks of a corporation as a ‘legal person’ -- as a subject of rights and duties capable of owning real property, entering into contracts, and suing and being sued in its own name separate and distinct from its shareholders. The first purpose of this paper is to end this age-old ‘corporate personality controversy’ once and for all. It is, however, not by declaring victory for one side or the other, but by declaring victory for both. The key to this claim is the observation that an incorporated firm is composed of not one but two ownership relations: the shareholders own the corporation and the corporation in turn owns the corporate assets. The corporation thus plays a dual role of a ‘person’ and a ‘thing’ in the system of law. This paper then shows how this person/thing duality of corporation is capable of generating two seemingly contradictory corporate structures -- one nominalistic and the other realistic. The second purpose of this paper is to reexamine the theory of corporate governance.
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