ABSTRACT
The corporate purpose debate is experiencing a renaissance. The contours of the modern debate are relatively well developed and typically focus on whether corporations should pursue shareholder value maximization or broader social aims. A related subject that has received much less scholarly attention, however, is the formal legal mechanism by which a corporation expresses its purpose – the purpose clause of the corporate charter. This Article examines corporate purpose through the evolution of corporate charters. Starting with historic examples ranging from the Dutch East India Company to early American corporations and their modern 21st century parallels, the discussion illuminates how corporate purpose has been expressed within the charter in a changing series of practices.
Examining this evolution reveals that throughout history, the sovereign state has firmly held the reins on the legal statement of corporate purpose by determining it as a matter of special grant or by requiring its articulation in the constitutional document establishing the corporation …
Pollman, Elizabeth, The History and Revival of the Corporate Purpose Clause (March 12, 2021). U of Penn, Inst for Law and Econ Research Paper No 21-15, Texas Law Review, forthcoming.
First posted 2021-03-18 13:00:35
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