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You can always contact our friendly customer support using chat or phone if you have complaints or need any help. Since the law has arisen from the society, a company has certain obligations for the society. Gradually, the notion emerged that incorporation of company is not merely for private benefits of shareholders, but also to promote the welfare of the society from which it takes inputs and generates the output.
The output, if not acceptable to the society, will put the existence of the entity in danger. Public interest and public policy objectives were thus gradually reflected in the legislations and regulations on companies.
Limitations on corporate power through the legislations and law such as doctrine of ultra vires were meant to regulate corporate activity for public welfare. The concoction of a company on property conception and social entity conception has long been debated.
Under the property theory, company is regarded as the private property of its shareholders. The function of the directors and managers is to further the interest of the shareholders who have appointed them.
In , the Michigan Supreme Court seemingly formalized the prevailing conception at the time that the corporation is a property of the shareholders. The Dodge brothers, as shareholders, sued the company. The brothers asserted that the shareholders owned the company and were entitled to force the directors to pay out more dividends.
On the other hand, Ford, who controlled the board of directors, took the position that the purpose of the corporation was to produce cheap goods and provide jobs at good wages, and only incidentally to generate wealth.
The powers of the directors are to be employed for that end.
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