6

The municipal governing body of the City of London is the City of London Corporation. Is there any special meaning to the term "corporation" in its name? (As opposed to simply a historical name, a remnant of the Middle Ages).

In other words, what does it have specifically in common with corporations in the sense of companies or commercial entities with limited liability?

6

Why questions are tricky, but here goes: Treatment of a municipality as a corporation seems a result of the incremental reform in government.

The City of London is historically important in that the Magna Carta of 1225 granted it special recognition, in English (translated from the original Latin):

The City of London shall enjoy all its ancient liberties and free customs, both by land and by water. We also will and grant that all other cities, boroughs, towns, and ports shall enjoy all their liberties and free customs.

That's great, but in a society of feudalism and monarchy, what legal entity is this talking about? Some nobleman, a bishop? No, it seems significant that by this time the Lord Mayor of London was elected and associated with a livery company. Livery companies evolved from guilds into corporations under royal charter which established personhood on entities that were not natural persons.

To this day, livery companies and liverymen play a significant part in the governance of the City of London. To some the situation seems even more odd when you consider that only liverymen can vote to elect the Lord Mayor of London, but it is well worth noting that the Lord Mayor is a separate and distinct office from the Mayor of London. Lord Mayor is more a ceremonial role; not too surprising in a country that distinguishes between the head-of-state and head-of-government.

As to limitation of liability, sure that's part of it. The idea of corporate liability limits the vicarious liability of any people associated with a corporation. But a corporation doesn't necessarily have stockholders who are escaping liability yet entitlement to profits by creating a "stock corporation". That's the form of corporation most people think of today, but it is a substantially newer development than London.

In the US, we draw a distinction between incorporated areas and unincorporated areas. For example, I once lived in the unincorporated area of Silver Spring, Maryland, which while having tall buildings and a population large enough to be considered a city has no local government aside from the county it is located in.

Finally, it's important to draw a distinction between an incorporated area and a company town, where practically all stores and housing are owned by the one company.

  • 1
    Given that it's at the root of the name, it might be worth explicitly listing the benefits of legal personhood, and thus of incorporation. – origimbo Nov 11 '18 at 19:46
  • Personally I'm not a big fan of treating corporations as people; I might not be a good spokesman. But it's a fact of life at least where I live. – Burt_Harris Nov 11 '18 at 19:58
  • It certainly has its problems, but there are obvious difficulties if a public office dies with the incumbent en.wikipedia.org/wiki/… – origimbo Nov 11 '18 at 20:02
  • The very lack of a body makes a corporation a fiction. You can't give a corporation a rap on the knuckles or a swat on the rear when young to influence its behavior when mature, nor can you throw one in jail. – Burt_Harris Nov 11 '18 at 20:15
  • 4
    Legal personhood does not mean that corporations have the same rights that *natural persons*(people), only that you can setup an entity that has some rights (like entering a contract) and obligations. For example, without legal personhood you could not be hired by a company, but only by a person, and if that person died then your job contract would end. – SJuan76 Nov 11 '18 at 23:11
4

To expand on Burt_Harris' excellent answer, the meaning of "Corporation" here is a legally generic, rather than special one.

  1. a. Law. A body corporate legally authorized to act as a single individual; an artificial person created by royal charter, prescription, or act of the legislature, and having authority to preserve certain rights in perpetual succession.

    A corporation may be either aggregate, comprising many individuals, as the mayor and burgesses of a town, etc., or sole, consisting of only one person and his successors, as a king, bishop, or parson of a parish. According to their nature, corporations are termed civil, ecclesiastical (U.S. religious), eleemosynary, municipal, etc.

Oxford English Dictionary

The concept of the legal person and of incorporation developed out of the need to apply existing common law based on personal representation in front of the court of one's Lord to the situation where multiple unrelated people were working to a common aim. A corporation could own property in perpetuity, have debts and make agreements, without the need for trustees, or deal with the awkwardness of inheritance or succession.

  • Thanks. In my mind the perpetual nature is the final nail in the coffin of treating corporations as persons: Obviously people aren't immortal, but corporations can be. ;-) – Burt_Harris Nov 12 '18 at 1:31
  • For cities however, some open-ended existence seems warranted. You really don't want a government to fall apart on schedule. Originally this was represented in the distinction between royal charters and grants. – Burt_Harris Nov 12 '18 at 1:41
  • origimbo, feel free to edit my posts any time. – Burt_Harris Nov 12 '18 at 2:09

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.