Corporations are the best way to create a business because the corporation exists as a separate legal entity and assumes all liability. In general, a corporation has all the legal rights of a human, except for the right to vote.
Almost everything in the world that you interact with every day is a corporation. Some examples are: THE UNITED STATES, YOUR STATE, YOUR COUNTY, YOUR CITY, THE POLICE, THE POWER COMPANY, THE PHONE COMPANY, THE CABLE COMPANY, THE INTERNET COMPANY, THE TV COMPANY, THE NEWS COMPANY, THE WATER COMPANY, THE GAS COMPANY, YOUR FOOD MARKET, YOUR FAST FOOD COMPANY, YOUR SCHOOL, YOUR DOCTOR, YOUR LAWYER AND at the end YOUR FUNERAL COMPANY…. and hundreds more that you only slightly brush against each day. You are tightly bound to most of these corporations by contracts which you signed when you applied for their products or service benefits. The federal, state, and municipal governments bind you with hidden invisible contracts, examples are: your driver license, or opening a bank account, enrolling your children in school, and recording your home property mortgage or deed. Every piece of “official” paper that you are required to sign is a contract which compels you to perform exactly to the terms and rules from that corporation.
The concept of incorporation was invented early in the colonial era as a grant of privilege extended by the Crown of England to a group of investors, usually to finance a trade expedition. The corporation limited the liability of investors to the amount of their investment–a right not held by ordinary citizens. Corporate charters set out the specific rights and obligations of the individual corporation, including the amount to be paid to the Crown of England in return for the privilege that was granted.
Thus were born the East India Company, which led the British colonisation of India, and Hudson’s Bay Company, which accomplished the same purpose in Canada. Almost from the beginning, Britain deployed state military power to further corporate interests–a practice that has continued to the present. Also from the outset, corporations began pressuring government to expand corporate rights and to limit corporate responsibilities.
The corporation is a legal invention–a socio-economic mechanism for concentrating and deploying human and economic power. The purpose of the corporation was and is to generate profits for its investors. As an entity, it has no other purpose; it acknowledges no higher value.
Many people understood early on that since corporations do not serve society as a whole, but only their investors, there is therefore always a danger that the interests of corporations and those of the general populace will come into conflict. Indeed, the United States was born of a revolution not just against the British monarchy but against the power of corporations. Many of the American colonies had been chartered as corporations (the Virginia Company, the Carolina Company, the Maryland Company, etc.) and were granted monopoly power over lands and industries considered crucial to the interests of the Crown.
Corporations are legal “persons“, they are persons with qualities and powers that no flesh-and-blood human could ever possess–immortality, the ability to be in many places at once, and (increasingly) the ability to avoid any liability. They are also “persons” with no sense of moral responsibility, since their only legal mandate is to produce profits for their investors. Look at GOOGLE and FACEBOOK as examples. Despite not being individual human beings, corporations, as far as US law is concerned, are legal persons, and have many of the same rights and responsibilities as natural persons do. For example, a corporation can own property, and can sue or be sued. Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations.
Corporations, no longer bound by national laws, prowl the world looking for the best deals on labor and raw materials. Of the world’s top 120 economies, nearly half are corporations, not countries. Thus the power of citizens in any nation to control corporations through whatever democratic processes are available to them is receding quickly.