Quote:
Originally posted by Captain
Exactly - it is a ficiton created by government! And that fiction is the primary benefit of being a corporation. It lets you dispose of interests as securities, it lets you have a corporation with limited liability, and it lets you have a decision making structure separate from your owners.
The federalists would have argued that corporations are horrific things that separate a business from those responsible for it. They would have argued that a corporate charter should only be granted for the public benefit for a project which some legislative body has vetted; they permitted, for example, the incorporation of the Erie Canal. A mere business would have an uphill battle.
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To be fair, there are a whole hosts of policy reasons why entities are a good thing. Frankly, I think those severely outweigh the concerns of the federalists. The other thing to note is that, while it's true that a corporation has limited liability, it is not
unlimited limited liability. See e.g., the piercing the corporate veil doctrine.
