Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 6 (2001)

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Cite as: 533 U. S. 158 (2001)

Opinion of the Court

denied, 531 U. S. 1050 (2001). Indeed, this Court previously has said that liability "depends on showing that the defendants conducted or participated in the conduct of the 'enter-prise's affairs,' not just their own affairs." Reves v. Ernst & Young, 507 U. S. 170, 185 (1993).

While accepting the "distinctness" principle, we nonetheless disagree with the appellate court's application of that principle to the present circumstances—circumstances in which a corporate employee, "acting within the scope of his authority," 219 F. 3d, at 117, allegedly conducts the corporation's affairs in a RICO-forbidden way. The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status. And we can find nothing in the statute that requires more "separateness" than that. Cf. McCullough v. Suter, 757 F. 2d 142, 144 (CA7 1985) (finding either formal or practical separateness sufficient to be distinct under 1962(c)).

Linguistically speaking, an employee who conducts the affairs of a corporation through illegal acts comes within the terms of a statute that forbids any "person" unlawfully to conduct an "enterprise," particularly when the statute explicitly defines "person" to include "any individual . . . capable of holding a legal or beneficial interest in property," and defines "enterprise" to include a "corporation." 18 U. S. C. 1961(3), (4). And, linguistically speaking, the employee and the corporation are different "persons," even where the employee is the corporation's sole owner. After all, incorporation's basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs. See United States v. Bestfoods, 524 U. S. 51, 61-62 (1998); Burnet v. Clark, 287 U. S. 410, 415 (1932); 1 W. Fletcher, Cyclopedia of the Law of Private Corporations 7, 14 (rev. ed. 1999).


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