§ 115 The Agents, Beneficiaries, and Members of a Corporation
Although corporations are fictitious persons, the acts and interests, rights and liabilities, attributed to them by the law are those of real or natural persons, for otherwise the law of corporations would be destitute of any relation to actual fact and of any serious purpose. Every corporation, therefore, involves in the first place some real person or persons whose interests are fictitiously attributed to it, and in the second place some real person or persons whose acts are fictitiously imputed to it. A corporation, having neither soul nor body, cannot act save through the agency of some representative in the world of real men. For the same reason it can have no interests, and therefore no rights, save those which are attributed to it as a trustee for or otherwise on behalf of actual human beings.290 Whatever a company is reputed to do in law is done in fact by the directors or the shareholders as its agents and representatives. Whatever interests, rights, or property it possesses in law are in fact those of its shareholders, and are held by it for their benefit. Every legal person, therefore, has corresponding to it in the world of natural persons certain agents or representatives by whom it acts, and certain beneficiaries on whose behalf it exists and fulfils its functions. Its representatives may or may not be different persons from its beneficiaries, for these two capacities may or may not be united in the same individuals. The shareholders of a company are not merely the persons for whose benefit it exists; they are also those by whom it acts. In the case of a corporation established for charitable purposes it is otherwise, for the beneficiaries may have no share whatever in the management of its affairs.
The representatives and beneficiaries of a corporation must not be confounded with its members. These last are, as we have seen, the individuals who form the group or series personified by the law, and who so constitute the corpus or body of the fictitious person thus created. Membership of a corporation does not in itself affect in any way the rights or liabilities of the members, for it is nothing more than a matter of form. A man’s privileges and responsibilities in respect of a corporation depend on whether he is one of its representatives or beneficiaries, not on whether he is formally accounted by the law as one of its members. Municipal corporations are constituted by the incorporation of the inhabitants of boroughs; but if by statute it were declared that they should consist for the future of the mayor, aldermen, and councillors, the change would not affect the rights, powers, or liabilities of any human being.
The extent to which the three classes of persons with whom a corporation is concerned, namely its members, its representatives, and its beneficiaries, are coincident and comprise the same persons, is a matter to be determined as the law thinks fit in the particular case. The members of a corporation may or may not be those by whom it acts, and they may or may not be those on whose behalf it exists.
It is worth notice that some or all of the members of a corporation may be corporations themselves. There is nothing to prevent the shares of a company from being held by other companies. In this case the fiction of incorporation is duplicated, and the law creates a fictitious person by the personification of a group of persons who themselves possess a merely legal and artificial personality.