Thursday, July 3, 2014

Corporations may crumble because of Hobby Lobby! It changes the definition of a Corporation dramatically.

http://www.motherjones.com/mojo/2014/07/hobby-lobbys-other-problem

Here's one more reason to worry about the Supreme Court's Hobby Lobby decision, which allowed the arts and crafts chain to block insurance coverage of contraception for female employees because of the owners' religious objections: It could screw up corporate law.
This gets complicated, but bear with us. Basically, what you need to know is that if you and some friends start a company that makes a lot of money, you'll be rich, but if it incurs a lot of debt and fails, you won't be left to pay its bills. The Supreme Court affirmed this arrangement in a 2001 case, Cedric Kushner Promotions vs. Don King:
linguistically speaking, the employee and the corporation are different “persons,” even where the employee is the corporation’s sole owner. After all, incorporation’s basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.

That separation is what legal and business scholars call the "corporate veil," and it's fundamental to the entire operation. Now, thanks to the Hobby Lobby case, it's in question.

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