...and then what? Does the world police appear and put the corporation (the legal entity) into prison? Because anything else is the same which might happen to a real nation, which you insist are completely different...
If you want to use legal terminology, then it goes with a functional legal system. There actually is a world police, and it's called the Corporate Court.
Nations do establish their authority over their territory by themselves, and then got this authority recognized by other nations, or get invaded.
Megacorporations joins the Corporate Court, and are granted the right to ignore national authority inside their facilities. It's the Corporate Court that forces nations to recognize this right. No corporations ever individually established itself as the sovereign authority over a track of land. They can have as many security guards and military troops inside their facilities, the surrounding nation is not going to try to exert their authority inside anyway. You may say this grant them a
de facto sovereignty. But if one corporation was to openly claim that its authority over one facility only derives from its military might and not from the Business Recognition Accords, that would be questioning the Corporate Court own authority. And the keystone to SR corporate system as it existed so far is that the megacorporations are willing to unite behind the Corporate Court to defeat any single megacorporation that don't play by the rules.
The Big Seven wanted to decide, through the Corporate Court, which corporation gets extraterritoriality, and which does not. Not because it sounded fun, but because it was power. If they let corporations decide to get extraterritoriality on their own, they lose that power.
If you want to switch directly to "might makes right" and that the only legitimacy comes from the effective use of force and not the mere threat of it, then there's no point in saying that corporations are "sovereign national entities," because you're ruling out that sovereignty has any meaning whatsoever for neither nations nor corporations.
While I agree with Nath that Corporations are not sovereign entities... corporate citizenship does cloud the issue. Does a nation entity which recognises the the citizens of another entity,also recognise that the 'nationality' of the entity exists and therefore the entity is in fact a nation-state?
In otherwords, if UCAS allows for Renraku employed wageslaves to renouces their UCAS citizenship and take up Renraku citizenship, isn't the UCAS actually acknowledging Renraku as a peer and fellow nation-state?
The UCAS can accept renunciation of citizenship, but it has no business in checking what other citizenship the person may be seeking. However, most countries actually don't even allow their citizen to renounce citizenship (the US is one of the few that does, allowing people to stop paying US taxes that otherwise must be paid by every US citizens).
The idea of dual or multiple citizenship is also pretty misleading. As far as the UCAS is concerned, you're either one of its citizen, or you're not.
One good example of this are consular assistance and extradition cases. Say you have someone arrested in Washington for stealing classified documents. If he only has Israeli citizenship, he can charged for spying and can require consular assistance. If he has Israeli-UCAS "dual citizenship", he can be charged for treason and cannot require consular assistance, as he's detained by his own country. But if he flees and moves to Israel, he won't be extradited because Israel, like most countries, does not extradite its own citizens.
As far as I know, foreign citizenship is only legally recognized for crossing borders and consular assistance (plus some bilateral agreements regarding military service for dual nationals). I know off precedents of recognized non-state citizenship for international organizations.
Members of the United Nations must accept diplomatic and service passports issued to UN personnel, even if they don't recognize the person's citizenship. I think the Holy See can also issue diplomatic and service passports, which are not the same than Vatican citizen passports. So I guess it's the same for other international organizations that don't belong to the UN, like Interpol. Citizens of European Union countries also have "EU citizenship" that allow them in some countries outside the EU to benefit from consular assistance of another EU country (while inside the EU, they're just a foreigner, who can be extradited and charged for spying).
I don't think there's something against accepting corporate ID documents when issuing visas, nor against allowing people legal assistance from their employer. It's calling it a citizenship that may be the biggest problem.