What is a Structure for Legal Definitions?
The basic (and broadest) legal definition of "structure" is "that which is composed of parts fitted together." (Black’s Law Dictionary 4th (1968), p. 1624). Whether a particular individual or entity is a "structure" will depend on the form of ownership and purpose of the structure. Generally, however, a "structure" can be a building, a business entity, or a person (as in its relationship with another person).
For example, a building and the business it houses are separate "structures" despite the fact that the former may be a significant asset of the latter . A partnership or a corporation would qualify as a "structure" separate from either of its owners for purposes of defining what constitutes its property for the purposes of taxes, regulatory reporting, or creditors. Similarly, for policies that exclude damages to, or caused by, a "structure," ensuring cause of loss exclusions are properly applied generally requires that the "structure" be viewed separately from a manager, user or tenant. In short, a "structure" is any entity (including physical assets, organizations, and relationships) that is deemed a separate "thing" from people that occupy, manage, or own it.
Structures under the Law
The term "structure" may refer to many different things under the law. A "structure" for legal purposes is not limited to a physical building or other construction, but includes corporate entities, legal entities, and organizations. A corporation, for example, is a "structure" for legal purposes and it is treated as a legal person.
The significance of what constitutes a "structure" under the law is that it is often a protected legal entity. All structures have associated rights and in many instances these rights are protected from interference from outside sources, including foreign government actors. In the internal affairs of each structure, there is usually an expectation that no officer, member, or other participant in the affairs of the structure would undertake actions to illegally interfere with the rights of other participants, or of the structure itself, under the laws of the state in which it was incorporated. That expectation is part of both the legal and practical definition of the corporate structure in most jurisdictions. For instance, the internal relationships between a corporation and its shareholders are often its own business, and protected from interference with foreign governments, including foreign investment authorities, unless the foreign government has legitimate regulatory authority to perform its investigations.
As another example, the internal affairs of a joint venture or limited liability company are its own business, and outsiders outside of the jurisdiction, including foreign governments, are expected to notify the regulatory agencies of their home country of the nature and extent of their investments in those businesses.
There is a lot of overlap between the structure of corporations and limited liability companies. There are also other structures, such as holdings companies, that are commonly found in global business. All structures have certain similar features, with the power or authority to manage the day-to-day business affairs, or the affairs of the entity itself, under the operating agreements, charter and bylaws, certificate, articles of incorporation, or similar constitutive document, of the structure itself.
Structures Relating to Real Property in Law
The term structure is widely used in some areas of real estate law but may not have a spelt-out definition in others. The Merriam-Webster online dictionary defines structure as a manner of construction, something constructed or a manner of building. The Oxford English dictionary defines it as a thing consisting of interrelated parts, however structure is defined in the context of real estate law generally and in the specific context of zoning regulations.
In the context of zoning regulations structure generally means any building or construction on a lot, including structures that are vacant and those that have been demolished but have not been removed.
In Cold Spring Hills, Inc. v Board of Appeals of Town of Huntington (112 AD2d 785 [1985]), the court considered the definition of structure in the context of Municipal Law 139(3). Noting that there is no definition of structure in ML 139(3), the court looked to the dictionary to define the word structure. It noted that there was no issue that the house and garage situated on the property were structures, but the question was whether the foundation of the house, which was no longer in use, constituted a "structure" within the meaning of ML 139(3).
The court held that "a foundation is a form of construction, consisting of interrelated parts, designed as a component of a larger whole, to support the weight of a building." Thus, the disclaimed foundation was deemed to fall within the definition of structure as set forth in Municipal Law 139(3).
In Tayfun K. Shakir v New York City Tax Commission, the issue was whether a boat dock was a structure. The definition of structure contained in the Beacon Harbor Haven code was as follows: STRUCTURE — Anything that is built, constructed, or erected which requires a location on the land or a space for occupancy. Structures include, among other things, buildings, swimming pools, tennis courts, decks, porches, docks, fences, towers, platforms, terraces, signs, vehicles and trailer parks, tent sites, recreational vehicle sites, campsites, billboards, and flagpoles.
Petitioner moved apartments in 2000 from which she operated a yacht delivery service; she moved them to her house on Beacon Harbor Haven after obtaining a shoreline permit and a building permit and had her son construct the dock adjoining the property.
A complaint was filed by the owner in April of 2001 claiming the dock was a structure requiring her to pay a 10% property tax on the commercial dock and other items considered structures. The issue was whether the boat dock was indeed a structure. The court held that "the term "structure" is broad enough to encompass the dock."
The court noted that: "In order to determine what qualifies as a structure under the Ordinance, generally, we may resort to the plain meaning of the word. [Citation omitted.] In addition, we may consider the purpose of the ordinance at issue (see, e.g., Matter of Conners v Levitt, 40 AD2d 915 [1972]; see also Fryer & Sons, Inc. v Davis, 153 AD2d 55 [1989], appeal dismissed 75 NY2d 754 [1989]), as well as the intent of the body enacting the ordinance in question (see Town of Hempstead v Bellacosa, 93 AD2d 623 [1983]), which we may ascertain from the language of the statute, its legislative history, and its context. [Citations omitted.] In addition, where the statute is susceptible of two or more reasonable interpretations, we may consider extrinsic evidence of an ambiguity, such as the legislative history of the statute in question (see Matter of Rudolph v State of New York, 249 AD2d 382 [1998])."
The meaning of the word "structure" in the context of real estate law depends on the context in which the term is applied in relevant statutes and regulations.
Structures in Corporations and General Business
Corporate and business structure is an important legal term with meanings across a variety of areas of law. While there are basic concepts the general public understands related to this term, there are more sophisticated definitions and nuances to explore. As a starting point, a "structure" at its most basic form refers to "the way in which the parts of a building or object are organized or arranged." Structure in the corporate law sense refers to the way in which a business or a company is organized legally. It encompasses almost all of the legal aspects of how a business operates and the consequences that flow from that organization. While there are many different types of business structures across the world, in connection with corporate law in the United States, the most common forms of business structure include the sole proprietorship, the partnership, and the corporation.
The sole proprietorship is the most basic form of business structure. In a purely legal sense, a sole proprietorship is one person who owns everything and is responsible for everything as an individual. While the person may use a business name and have employees, it is still all one person behind the curtain. The person operating the business simply reports any income earned by the business and any expenses listed on the business tax return as simply income and expenses earned/incurred by a person. While this is very simple, it also has complexities when it comes to liability, as a sole proprietor is, in essence, an unlimited owner. As such, some people elect to create a more complex business structure than a pure sole proprietorship. One way to do this is to create a partnership.
A general partnership is a group of two or more people who elect to run their businesses for profit and share all of the profits and losses 50-50 among each partner . While a legal partnership can be created as a matter of law, it is recommended that a partnership agreement be created between the partners which sets forth the terms of their relationship and the manner in which they plan to share profits and incur losses. Where a partnership is formed, liability issues also arise in that each partner is individually liable for the debts of the partnership and is required to pay them in the order of priority established by law. If that is not something that interests the partners, then many people elect to form a different business structure, which is the corporation.
The corporation is a more complex but more limited business structure than the partnerships and the sole proprietorships. A corporation is a separate legal entity formed by one or more individuals or entities. A corporation provides both tax benefits as well as limits on liability. Corporate liability is limited to the owners (i.e., shareholders). Shareholders are not individually liable for the debts of the corporation and any losses of the corporation are limited to the money each shareholder has or would be willing to invest in the corporation. The level of liability of each shareholder varies from corporation to corporation depending on the decision of the owners. One downside of the corporate structure is that there is greater state regulation of the corporation. For example, to form a corporation in most states, the corporation must file documents with the Secretary of State and the corporation is required to pay annual state fees and taxes and other reporting requirements. There are also in some cases burdensome federal requirements for corporations, for example under the Sarbanes-Oxley Act.
Structures, Pitfalls and Alternatives
A multitude of legal challenges can arise from the interpretation of structural definitions. Disputes often arise in courtrooms, arbitration rooms or in administrative agencies. Consider some of the following potential issues:
a. Are certain substances exempt from regulation? What about those substances that are regulated whether or not they are isolated?
b. Can the agency regulate certain compounds if they have not been studied and/or characterized? What if such compounds cannot be studied or characterized based on their structure?
c. What if the agency provides a list of regulated substances and not a definition? Does that create liability for those not on the list?
d. What if two compounds have the same structure, but one is regulated and the other is not?
e. What if a new scientific discovery occurs and compounds based on that discovery cannot be accurately defined?
f. Can the agency create an exemption based on structure? Can that exemption be violated based on the existence of N-propanol, specifically because the agency believes the S-isomer is the only toxic one?
g. Can the agency regulate intermediates if the characterizing compound or atom cannot reasonably be defined? Can it regulate the "building blocks" of such compounds?
h. Can an industry specifically designed to work with one structure be liable for violations that occur when the industry converts that structure into another?
Regulations, chemicals, and the law are always in a state of flux. The scope of structural definitions can have profound impacts on myriad issues, whether direct, indirect or unintended. Issues examined in this section must be subject to continual reevaluation.
Trends: Evolving Definitions into the Future
The rapid pace of technological advancement often leads to calls for legal reforms. One area poised for a potential redefinition is "structure," particularly as we continue to see only a small fraction of our economy concretized in fixed infrastructures like buildings, roads, and bridges. Virtual structures are being regularly introduced in a variety of fields, posing a challenge for definitions of structure that have stuck closely to the concrete, functional sense of the word.
Some new virtual structures include things such as Internet-based business structures like the Amazon "store," or "do it yourself" businesses that offer multiple services without a physical presence. The question arises whether and how these structures will fall in the law’s traditional methods of allocation, measurement, or classification. Will courts be able to determine when a structure is to be considered a structure for purposes such as determining what falls under the tax code or under the jurisdiction of a liability court? So far, no guidance has been given as to how the law will handle this growing ambiguity.
From an intellectual property standpoint , the definitions of substance versus form may not hold should all things remain as they are today. In other words, even if we saw greater invention around virtual structures, if the majority of our economy continues to rely on fixed structures like buildings and roads, we may still see many of the same old structures in IP materials like patents and trade secrets.
In social contexts, virtual structures such as social networks still rely on those fixed structures. For example, even as social networks have revolutionized communication and changed the way people relate to one another, the real content – and the real people – still exist outside of cyberspace. Once in a while, we still see platonic relationships turn to sexual interactions, leading to physical world consequences. Like the mechanics have shown, we might still behave the same ways as we did generations ago, making virtual structures ultimately irrelevant for social control purposes.
As our world becomes increasingly digital, we may well see changes that will force structure to change with it. Although the jury is out, for the moment, the legal definitions around structure have not evolved very much to reflect ever-advancing cultural and technological landscapes.
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