{"id":5127,"date":"2024-04-25T13:02:07","date_gmt":"2024-04-25T17:02:07","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/hblr\/?page_id=5127"},"modified":"2025-08-19T12:52:14","modified_gmt":"2025-08-19T16:52:14","slug":"volume-14-2023-2024","status":"publish","type":"page","link":"https:\/\/journals.law.harvard.edu\/hblr\/volume-14-2023-2024\/","title":{"rendered":"Volume 14 (2023\u20132024)"},"content":{"rendered":"\n
CORPORATE LAW & GOVERNANCE<\/h5>\n\n\n\n

THE FALLACY OF COMPLETE CORPORATE SEPARATENESS<\/a><\/strong><\/h3>\n\n\n\n
Mariana Pargendler1<\/a><\/sup>Full Professor of Law, Funda\u00e7\u00e3o Getulio Vargas School of Law in S\u00e3o Paulo; Global Professor of Law, New York University School of Law. I am grateful to Henrique Arake, George Georgiev, Carlos Portugal Gouv\u00eaa, Burt Neuborne, Elizabeth Pollman, Mario Schapiro, Richard Squire, Robert Thompson, and participants in the workshop on \u201cHidden Fallacies in Corporate Law and Financial Regulation,\u201d the Bocconi-Oxford Junior Scholars Workshop on Corporate Law and Finance, the Droit & Croissance Workshop, and the Wharton Legal Studies Seminar for helpful comments and suggestions.<\/span><\/h6>\n\n\n\n

Legal discourse about business entities has displayed a logical fallacy regarding the consequences of corporate separateness. A fallacy of equivocation occurs when a term is used with one meaning in the premise and with another meaning in the conclusion. Legal personality undoubtedly provides a separate\u2014in the sense of distinct\u2014nexus for the imputation of legal rights and duties. This, however, does not mean that corporations are or should be treated as legally separate\u2014in the sense of insulated\u2014from shareholders in all contexts. Moreover, legal insulation between corporations and shareholders for some purposes (e.g., limited liability) does not necessarily entail insulation for other purposes (e.g., the application of a contractual or regulatory scheme). In effect, there is significant, if varying, permeability between the legal spheres of corporations and shareholders across different areas of law, including corporate law. Rather than a nonconductor that always isolates the legal spheres of the corporation and related parties, legal personality operates as a semi-permeable membrane. Nevertheless, the recurrent fallacy of complete corporate separateness has obscured and hampered the development of legal doctrine in several contexts.<\/p>\n","protected":false},"excerpt":{"rendered":"

CORPORATE LAW & GOVERNANCE THE FALLACY OF COMPLETE CORPORATE SEPARATENESS Mariana Pargendler Legal discourse about business entities has displayed a […]<\/p>\n","protected":false},"author":109,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-5127","page","type-page","status-publish","hentry"],"jetpack_shortlink":"https:\/\/wp.me\/PgKEUK-1kH","jetpack-related-posts":[{"id":5347,"url":"https:\/\/journals.law.harvard.edu\/hblr\/volume-15-issue-1\/","url_meta":{"origin":5127,"position":0},"title":"Volume 15, Issue 1","author":"wgu","date":"March 4, 2025","format":false,"excerpt":"SECURITIES & FINANCIAL REGULATION CAN SECTION 11 BE SAVED?: \u201cTRACING\u201d A PATH TO ITS SURVIVAL John C. 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