Corporate Law after Hobby Lobby
THE BUSINESS LAWYER, Vol 70 - November 2014 Forthcoming
33 Pages Posted: 10 Oct 2014 Last revised: 30 Jan 2015
Date Written: October 8, 2014
We evaluate the U.S. Supreme Court's controversial decision in the Hobby Lobby case from the perspective of state corporate law. We argue that the Court is correct in holding that corporate law does not mandate that business corporations limit themselves to pursuit of profit. Rather, state law allows incorporation 'for any lawful purpose.' We elaborate on this important point and also explain what it means for a corporation to 'exercise religion.' In addition, we address the larger implications of the Court's analysis for an accurate understanding both of state law's essentially agnostic stance on the question of corporate purpose and also of the broad scope of managerial discretion.
Keywords: Corporate purpose, Corporate personhood, Shareholder wealth maximization, Shareholder primacy, Corporate social responsibility
JEL Classification: K10, K20, K22
Suggested Citation: Suggested Citation