Corporate rights and obligations—the perspective of real entity theory

Abstract

This paper examines the theoretical basis for corporate legal rights and duties from a corporate law perspective. Three theoretical approaches are discussed: concession theory, nexus of contracts and agency theory and real entity theory. The paper argues that real entity theory offers the most suitable framework for analysing corporate legal rights and duties. It acknowledges organisations as separate from their participants, justifying the provision of independent rights and obligations through the corporate form.