Corporate "personhood" is in the news again with SCOTUS granting cert in the Hobby Lobby case to determine:
Whether the Religious Freedom Restoration Act (RFRA)..., which provides that the government “shall not substantially burden a person’s exercise of religion” unless that burden is the least restrictive means to further a compelling governmental interest, allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law, based on the religious objections of the corporation’s owners.
I'm not so much interested in the specific issue in the case, primarily because the outcome is clouded by the RFRA* - absent which Hobby Lobby would have lost and there would be no SCOTUS case - but to revisit a question I had when this topic was discussed here before.
That is, corporations are entirely creatures of statute - legal fictions, in other words. They have only the ability to do things that the state allows them to do (to own property, sue and be sued, etc.). In the past, state laws limited these things in large ways, and the articles of incorporation of corporate entities would also limit what the entity could do, but these days it seems these limits have largely gone by the wayside, so a corporation can do anything that is "lawful" as long as certain procedures are followed.
In any event, the underlying legal creation is still there. Without state law, there are no corporations, unlike natural persons. So, my question is: what happens to corporations formed under state law when that state repeals its corporate code?
This is different, in my mind, than revoking a corporate charter, which would require some sort of process (due or otherwise) to be followed under current judicial precedent (e.g., just compensation if it's a taking, notice/opportunity to be heard, trial, etc.). Delaware's corporate code revokes corporate charters for failure to pay franchise tax, but only after certain procedures are followed.
Rather, this would be the end of corporate law itself. There would be no such thing as a corporation after repeal. So....what happens? Could a state even do this? The Delaware Corporate code provides that if a corporate charter is revoked then a court has the power to wind up its affairs, including "to make such orders and decrees with respect thereto as shall be just and equitable respecting its affairs and assets and the rights of its stockholders and creditors." So, would there be some sort of statewide corporate wind up, with, I assume, corporate property sold and the proceeds distributed to shareholders (or the property itself distributed)? What if repeal doesn't provide for such a process? Would repeal constitute some sort of "taking" requiring just compensation? Taking of what? Limited liability?
I have to imagine this has come up before, but I can't seem to find an example (hence looking at the law governing charter revocation).
*I do hope SCOTUS realizes the can of worms it would open by ruling that corporations are covered by the RFRA, either directly or indirectly through its shareholders. The case produce an interesting vote count.