Corporation Bashing

[clgustaveson]

Now, I am not completely anti corporation... but I do have a problem with their existance. The sole purpose of a corporation is to protect an individual of any wrong doing -- for a price. (but this is another discussion)

Actually, that is not the purpose, sole or otherwise, of a corporation. But as you said, that is another discussion.

Sure it is... limited liability, double taxed.... it is definately "otherwise" but IMO is the sole reason.

A corporation is a legal personality which holds its own in a court of law. The actions of those running the comapany are only held at their face value. A corporation probably wouldn't exist if it werent to protect the liability of those with a financial interest in the company.

 

[leftsock]

A corporation is a business, and the purpose of a business is to create value for its shareholders. These shareholders didn't invest in the company to be protected from liability, they invested in the company to get a return. These shareholders are greatly affected by the financial decisions of the corporation, and they are only "protected" in so much that the value of their investment becomes zero.

 

[neraph]

I'm interested in following this discussion, but what exactly are we talking about?

Are we talking about "Limited Liability Companys", and 501c3's, as well as "Corporations".
Also, are we distinguishing between publicly traded and privately held corporations?

 

[clgustaveson]

A corporation is a business, and the purpose of a business is to create value for its shareholders. These shareholders didn't invest in the company to be protected from liability, they invested in the company to get a return. These shareholders are greatly affected by the financial decisions of the corporation, and they are only "protected" in so much that the value of their investment becomes zero.

You are confusing the goal of a business with ones reason to incorporate.

The purpose of a corporation is to create value for shareholder, not a busines. Not the other way around. Not all corporations are public, not all businesses are corporations.

A business becomes a corporation to offer protection from financial liability. So if there is a lawsuit those who run the company most likely will not have to pay. Obviously insurance is there as well, but thats another topic.

In a market, wrong doing doesn't mean illegal or solely criminal acts. Playskool for example makes a bad product and whatever oversight there is makes them recall this product.

The ONLY reason a company would become a corporation is to protect those with a financial interest from having the liability of their endeavour.

 

[clgustaveson]

I'm interested in following this discussion, but what exactly are we talking about?

Are we talking about "Limited Liability Companys", and 501c3's, as well as "Corporations".
Also, are we distinguishing between publicly traded and privately held corporations?

I think public companies have a little more "reason" but they still most likely incorporated for the same reason, they went public for other reasons.

 

[88GT]

Sure it is... limited liability, double taxed.... it is definately "otherwise" but IMO is the sole reason.

A corporation is a legal personality which holds its own in a court of law. The actions of those running the comapany are only held at their face value. A corporation probably wouldn't exist if it werent to protect the liability of those with a financial interest in the company.

From the guy who probably gets paid via a W-2 form.

Let's correct some of your claims and the proceed with the discussion. A corporation is a legal entity, not personality.

What do you mean by "holds its own court of law?"

The actions of those running the company are held against the legal standards set forth for company leadership in state and federal laws AND against the standards set forth by the Board of Directors. There is no immunity against wrong doing simply because one holds a leadership position in a corporation.

But you are right on one account: a corporation wouldn't exist if asshat money-grubbing serfs didn't feel they had a right to the personal assets of the business man. Incorporation limits the liability to only those assets of the business. Or do you really suggest that a man has a claim beyond the nature of the relationship in which he was harmed? Do you really feel Joe the Plumber's house is up for grabs if he causes damage to another man's house during a job?

Seems we have our own proponents of class warfare amongst us.

 

[clgustaveson]

From the guy who probably gets paid via a W-2 form.

Let's correct some of your claims and the proceed with the discussion. A corporation is a legal entity, not personality.

What do you mean by "holds its own court of law?"

The actions of those running the company are held against the legal standards set forth for company leadership in state and federal laws AND against the standards set forth by the Board of Directors. There is no immunity against wrong doing simply because one holds a leadership position in a corporation.

But you are right on one account: a corporation wouldn't exist if asshat money-grubbing serfs didn't feel they had a right to the personal assets of the business man. Incorporation limits the liability to only those assets of the business. Or do you really suggest that a man has a claim beyond the nature of the relationship in which he was harmed? Do you really feel Joe the Plumber's house is up for grabs if he causes damage to another man's house during a job?

Seems we have our own proponents of class warfare amongst us.

The term 'legal personality" is not one I made up... google it before you claim I am wrong.

By means of business and money, nobody cares about anything else in business. Liability from shooting a dog in the name of business is irrelevant - when speaking of business what is the only relevant thing... MONEY.

I made a clear explination of this in a previous post.

Also, you are just as likely to get paid via W - 2 as I am, so making that comment is dumb.

Next point - Joe the plumber should be held liable for any and all damage he causes... if he screws my house to point of no return he better be able to fix it or pay for it to be fixed... an eye for an eye gets lost in the corporate hoohah sh@##t.

I am glad your argument isn't as dumb as the last one...

 

[hornadylnl]

Have you ever met John Galt?

 

[clgustaveson]

Have you ever met John Galt?

Who is John Galt? wink wink

 

[clgustaveson]

I am not completely anti corporation, I am no Ralph Nadar -- don't even like him.

But it's an honest point to make, I am a complete conservative. I don't think they should be absolved but there is no reason that a single person should be able to incorporate to protect themselves from their own mistakes.... BAD BAD BAD BAD

 

[leftsock]

Who should be able to incorporate then?

 

[clgustaveson]

Who should be able to incorporate then?

Those who have less of a managing role in the business.... those who need funding... those who would like to pool the resources of others and create a more complex management style.

 

[hornadylnl]

What came first, corporations or the loss of personal responsibilty? Most people incorporate to shield themselves from those playing the legal lottery. Our populace has gotten so sue happy that people are afraid to even help each other.

Let's expound on Joe the plumber here. You hire him to install a gas line for your new stove and it leaks causing your house to blow up. Did you hire him off of craigslist? Did you bother to check his credentials? Did you check to see that he's insured? Did you bother to get any references? Or did you just open up the yellow pages and call the first name under plumbers?

I work industrial maintenance and have done residential wiring in the past. I just wired my entire house and barn with a total of about 100 circuits. I know what the f I'm doing with it. I've seen people on here asking for help with electrical work and I've only offered to help 1 time because I knew the charactor of the guy I helped. In his instance, I wired up 2 outlets in his garage. Too many people are the type that if an electrical fire started in a switch at the other end of the house would sue me because I'm the last person to have worked on it. It's not worth the legal risk helping people anymore. Especially not for what people want to pay anymore.

Rather than people accepting their own share of blame and taking their loss, they want to sue. I don't blame anyone for shielding their personal assets. We as consumers must do our own part in choosing who we hire or buy from.

 

[dross]

Let me use a real life example I happen to know about.

A guy has a business. The business has a parking lot. The guy hires a service to clean up his parking lot.

A customer trips on a piece of nylon that is used to bind shipping boxes. The customer gets injured. The customer sues the company who owns the parking lot and the company who cleans up his parking lot. The customer wins.

So, are you saying that in addition to being paid from the business assets, that the customer should also be able to attach the business owner's house and car and his personal bank account?

Corporation laws are not so that people can escape their wrongdoing, in many cases the corporate umbrella doesn't protect people from actions which are truly wrongful or grossly negligent. Incorporation laws protect people from the daily legal liabilities of doing business, which if you had ever been a business ower you would realize are many, and they are often unforeseeable and unpreventable.

 

[leftsock]

Those who have less of a managing role in the business.... those who need funding... those who would like to pool the resources of others and create a more complex management style.

So two people getting together to start their business would have to hire someone, probably a group of people, to manage operations, and their involvement is limited to that of regular employees or silent investors?

 

[clgustaveson]

Let me use a real life example I happen to know about.

A guy has a business. The business has a parking lot. The guy hires a service to clean up his parking lot.

A customer trips on a piece of nylon that is used to bind shipping boxes. The customer gets injured. The customer sues the company who owns the parking lot and the company who cleans up his parking lot. The customer wins.

So, are you saying that in addition to being paid from the business assets, that the customer should also be able to attach the business owner's house and car and his personal bank account?

Corporation laws are not so that people can escape their wrongdoing, in many cases the corporate umbrella doesn't protect people from actions which are truly wrongful or grossly negligent. Incorporation laws protect people from the daily legal liabilities of doing business, which if you had ever been a business ower you would realize are many, and they are often unforeseeable and unpreventable.

Unrelated....

 

[clgustaveson]

So two people getting together to start their business would have to hire someone, probably a group of people, to manage operations, and their involvement is limited to that of regular employees or silent investors?

Not quite, sometimes silent investors are already protected. What I mean is sometimes a business needs capital, going public is the answer... should all the investors be liable beyond their investment? No.

 

[dross]

Unrelated....

I'm sorry, I thought this thread was about the reasons for incorporation and whether those reasons were justified. What is it about?

 

[ATOMonkey]

Here's another real world example.

You make incandescent light bulbs.

The government passes a law saying that your business is now illegal. You don't have the working capital or credit to begin making CF light bulbs, and you can't get the government permits and EPA certs to make CF light bulbs. (Mostly because the law was a kick-back to GE for all their contributions)

What do you do with the current line of operating credit you have open? What about the mortgage on the building? The credit used to buy the machines? Etc etc etc...

You're officially boned through no fault of your own.

If you were a sole proprietor, you would lose everything you had.

If you were incorporated, creditors would only have legal recourse against the business, not your personal assets.

 

[Bosshoss]

Have you ever met John Galt?

Have you?

Who is John Galt? wink wink

John Galt is a fictional character in a book. (I know you knew that) Not unlike Jack Ryan in Tom Clancy's books or Bob Swagger in Steven Hunter's books. I live in the real world and like a good read as much as anyone but I don't make decisions based on fictional characters or use fictional characters to back my arguments.