Shareholder Responsibility

in business, kosher

If the shareholders are not the owners – the ones who bear responsibility – then who is?

Several answers are given to this question:

  • A few authorities take the secular-law concept of a legal person at face value: the corporation itself is the owner. The halakhic justification for this is sought in legal-person- like entities such as the “tzibbur” (community) or “hekdesh” (Temple-owned property); in the authority of the secular law in monetary matters; or in the power vested in halakhic authorities to innovate new forms of ownership just as secular legislators do;
  • Alternatively, the management of the company may be considered to be the “real” owners, who owe the shareholders a share of the profits. Or, if there is a controlling interest, then the controlling shareholders may be considered the “real” owners, leaving minority shareholders as run-of-the-mill creditors.