Opinion ID: 3163900
Heading Depth: 2
Heading Rank: 1

Heading: Ordinary Meaning of “Corporation”

Text: We begin with the fact that the word “corporation,” standing alone, ordinarily refers to both for‐profit and nonprofit entities without distinction. The dictionary definition of “corporation” is not restricted to entities that carry on activities for profit. See Webster’s Third New International Dictionary 510 (1993) (defining “corporation” as “an entity recognized by law as constituted by one or more persons and as having various rights and duties together with the capacity of succession,”); Oxford English Dictionary (2d ed. online version 2015) (defining “corporation” as “an artificial person created by royal charter, prescription, or act of the legislature, and having authority to preserve certain rights in perpetual succession”). The famous definition given by Chief Justice Marshall in Trustees of Dartmouth College v. Woodward is to the same effect: “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.” 17 U.S. (4 Wheat.) 518, 636 (1819). A profit‐seeking motive does not appear on the list of distinguishing characteristics of a corporation given in one leading treatise. See 1 William Meade Fletcher, Cyclopedia of the Law of 6 Corporations § 5 (listing those characteristics as follows: a corporation “is an artificial person, a legal entity, capable of acting through its corporate officers and agents, of suing and being sued, of taking and holding property, of contracting in its own name, and of continuing to exist independently of the individuals who compose it”(footnotes omitted)).1 MMC argues for a different starting point. It contends that, “in ordinary, everyday usage,” the word “corporation” refers only to for‐profit entities, as in the assertion that “corporations are a force for good in the world.” That argument is unpersuasive. While it is true that, in the context of a bar‐ or dorm‐ room political discussion, “corporation” may refer exclusively to profit‐seeking business entities, that is not, as we have seen, the “ordinary, everyday” definition supplied in the dictionary. Further, in the colloquial sense advocated by MMC, “corporation” typically refers to any profit‐seeking legal entity, regardless of form, and includes entities like partnerships, which are not treated as corporations by the Internal Revenue Code. See I.R.C. § 7701(a)(2) (defining “partnership” as an “unincorporated organization . . . which is not, within the 1 Black’s Law Dictionary states that a corporation is “usu[ally] a business.” Corporation, Black’s Law Dictionary (10th ed. 2014). But that statement too necessarily implies that the word sometimes refers to entities that are not businesses. 7 meaning of this title, a . . . corporation”). While such loose use of the word “corporation” may be appropriate in the context of a casual debate about the role of the profit motive in contemporary society, it cannot be the meaning that controls in the Internal Revenue Code.