Is there a concept in Jewish law similar to a corporation?

Question

In modern law, a corporation, according to Black's Law Dictionary, is an "artificial person or legal entity created by or under the authority of the laws of a state or nation . . . ordinarily consisting of an association of numerous individuals." Assuming that the corporation has its own assets, a creditor who has done business with the corporation, or a tort claimant, may only collect from the assets of the corporation, and not its members or shareholders. The corporation's own liability and structure effectively shields its shareholders from personal liability for the debts of the corporation, unlike a partnership whose members are legally required to make good the debts of the partnership if the assets of the partnership are insufficient.

Is there anything comparable in Jewish law?

Answer 1

In the article by Rabbi Dr. Michael Broyde and Prof. Steven Resnicoff cited by Isaac Moses in his comment to the question, there is a brief summary at page 2, followed by discussion and sources. See the original text for footnotes. They write:

The sparse literature on the relationship between corporate ownership and Jewish law obligations reflects the following five principal positions:

1. The "Jewish law (halakhic) entity" approach. This view maintains that Jewish law deems a corporation to be an independent entity that owns its assets and conducts its business. According to this view, shareholders do not own title to the corporate assets and are not in violation of Jewish law when the corporation commits a forbidden act.

2. The "halakhic partnership" approach. There are three versions of this view. The first contends that Jewish law recognizes a corporation as a partnership (shutfut). The shareholders are regarded as partners who own a percentage interest of the corporate assets. A second version maintains that Jewish shareholders are partners only if the corporation has primarily Jewish shareholders. A third alternative describes Jewish shareholders as partners only if they own voting shares.

3. The "halakhic creditor" approach. Some authorities who espouse the second or third versions of the halakhic partnership theory believe that Jewish shareholders who are not partners are, instead, creditors who have loaned money to the corporation or to the corporation's managers. n21 As creditors, such shareholders would not be responsible under Jewish law for the corporation's conduct.

4. The "purchaser of entitlements" approach. At least one authority suggests that in many instances a Jewish shareholder is merely a purchaser of certain financial benefits vis-a-vis the corporation's future profits.

5. The "relationship" approach. Some authorities do not use a single label to describe the abstract relationship between Jewish shareholders, on the one hand, and corporate assets and activities, on the other. Instead, they examine diverse aspects of the relationship and ask whether, as a whole, it constitutes ownership such as to implicate particular Jewish law problems. Exponents of this approach consider, for example, the shareholders' ability and intention to control corporate conduct and to use or sell corporate assets.

While this does not directly answer my question, it appears to indicate that there is no direct analogy to corporations in Jewish law, but instead these are accomodations that Jewish law has made to the existence of corporations in secular law.

Answer 2

Because the question does not ask about corporations per se, but about halakhic institutions that might be similar to it, the answer to that question is yes. There are a few such concepts that bear similarity to the modern legal definition of a corporation, without being partnerships (though none are exactly the same):

1. Mamon Hashevet: when Terumah or Maaser was taken from produce, but the owner of the produce has yet to give it to an individual kohen/levi, the produce belongs to "the collective tribe". Rambam (Hil. Maaser 6:15-17) seems to indicate that the levite tribe is, in this sense, a corporate entity. However, R. Asher Weiss (Sh"t 1:105-106) says that although there are differences between it and a normal partnership, that’s merely because in the case of the tribe, the human partners are unspecified, but it's actually nothing more than a partnership between all of the levites.

2. Mamon Aniim: Maharit (Y.D. 45) writes that money invested for the poor can be used to gain interest through loans, because nobody owns it, despite the fact that the money was set aside for the particular group of people. Mishneh Lamelech (Malvah VeLoveh Ch. 4) and Maharshag quote the Maharit, understanding that in his case, nobody owns the money at all. They might mean that the money is literally ownerless, but because of the mitzvah of tzedakah be required to be used in certain ways, or they might mean that no one person owns the money, but instead is owned by some other legal entity, which is exempt from usury.

3. Tefisas HaBayis: an estate, which is the collective ownership of all of the legal heirs who inherit a deceased person's property. Some understand this to be no different than a partnership, but others, such as R. Elchanan to Bava Basra 126b, see it as a distinct legal entity that all of the inheritors are allowed to use, but do not own.

4. Communally Collected Funds: (1) R. Elchanan to Bava Basra 126b indicates that an estate and communal funds are distinct from partnerships, and such an idea is found in many achronim. R. Asher Weiss points out (aforementioned teshuvah) writes that this is not true, however, and collected communal funds must be considered a shared owndership, because a community-member is able to prohibit others from benefiting from his portion, implying that he fully owns his percentage of the funds (Nedarim 48a).

5. Chevrah Hamanui al haPesach: a group of people who share a korban Pesach, before it is sacrificed, need to specify that this korban will be theirs, but many of the rules for this are different from normal rules of ownership. Thus, R. Menachem Zemba (Zera Avraham 4:21-24) says that the appointed group for Korban Pesach share in the ownership but are not partners, and implies that the korban is actually owned by an entity made up of all of members. However, ownership for the purposes of sacrifices is in many ways a totally different animal.

Related: What is the halachic status of corporations? and Are corporations with Jewish shareholders allowed to charge interest

Answer 3

There is one way of viewing the gifts to the Priesthood as if they are owned by the entire Priesthood before they are given to one specific priest. If this is so, if one stole a gift that was to be given to a priest (for example, a first born sheep) (see Bava Metzia 6b), the person stolen from cannot claim for the return of the sheep, only the "value of gratitude", i.e. the amount a specific priest's gratitude is worth by giving it to him as opposed to another priest. Furthermore, the thief still has to give the sheep to a priest of his choice, but not of the choice of the one he stole from.

Answer 4

I wouldn't be so quick to judge that there is no such thing as a corporation in Jewish Law. Nor would I be quick to judge that there is such a thing. As with any system of laws, it will differ from others. Jewish Law deals with partnerships all the time. In many ways, there is such a thing as a corporation, in that certain legal entities are exempt from liability from certain things that an individual would be liable for. On the other hand, however, there are certain limits to this immunity. U.S. law is not mirrored exactly in Canadian law, EU law, Brazilian law, Israeli law, or any other legal code. Even within the U.S. Code, there are different types of corporations and partnerships, each with different responsibilities and privileges.

In short, yes, there is something that might be considered a corporation in Jewish Law - it's a partnership entity with legal status that can protect its members from certain liabilities and responsibilities, yet obligates them in others. But no, it does not mirror the concept in U.S. law.