Quote:
Originally posted by sgtclub
I don't understand what you mean by this.
I don't understand how you get here either.
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The entity theory is that an entity like a partnership or corporation is a separate juridical person, and is to be analyzed as such. This is the basis for limited liability of different forms of entities, and the early days of corporate law are filled with discussion of the entity theory and its implications, which many people had real trouble fully comprehending.
The aggregate theory is the idea that an entity is simply an aggregate of its members, and is the basis for general partnerships and for organizations like Lloyds of London; under an aggregate theory, an entity is simply an extension of its participants.
Aggregations were considered the norm in business organization for centuries, until special purposes corporations were developed and became more and more popular. Since those corporations needed a special act to grant them, they were very limited to the privileged.
The Jacksonians were primarily responsible in the U.S. for the idea that there should be a corporate statute under which people could form corporations at will; they viewed this as a leveling exercise that would make available to ordinary people a privilege of the wealthy. However, in putting the first corporate statutes in place, there was much discussion of how to protect the public by ensuring adequate capital, by levying fees for the privilege, and by requiring corporations to submit themselves to public oversight.
What seems to have happened today is that we have lost sight of the fact that corporations are entities for virtually all purposes, and that this separate treatment is a privilege bestowed by the state. Now people are arguing "double taxation", in other words, aggregate treatment, without seeing that there is any other side to aggregate treatment.
