View Full Version : Economic: Corporations: Several Questions on Corporations

12-21-2011, 12:32 PM
I posted this on the DP several months ago and thought I'd visit Liberty Forest for some assistance.

I'm having trouble understanding the Austrian position on corporate law since we advocate the rights of individuals as oppose to groups.

I assume it's obvious there are certain advantages to incorporate: (I copied the following from incorporate.com)

How You Can Benefit from a Corporation or LLC

Regardless of their size, all businesses can benefit from incorporating. Advantages of forming a corporation or Limited Liability Company (LLC) include:

Personal asset protection. Both corporations and LLCs allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations.

Additional credibility. Adding "Inc." or "LLC" after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.

Name protection. In most states, other businesses may not file your exact corporate or LLC name in the same state.

Perpetual existence. Corporations and LLCs continue to exist, even if ownership or management changes. Sole proprietorships and partnerships just end if an owner dies or leaves the business.

Tax flexibility. Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.

Deductible expenses. Both corporations and LLCs may deduct normal business expenses, like salaries, before they allocate income to owners.

It seems allowing "limited liability" to certain groups (corporate officers) as oppose to others (sole proprietorships/individuals) is giving one advantages and benefits over the other. It also tends to encourage and protect bad and harmful decisions.

And what ever happened to 20-year corporate charters for government sponsored enterprises? Should all corporations' corporate status only be granted for a certain amount of time at which upon conclusion, they must apply for renewal? (I hate the implications of that question suggesting some newly created government "committee" would decide if corporate renewal is granted.) Should every company be allowed to be granted corporate status? I read somewhere that years ago corporate status was only granted for a certain amount of time and if the corporation served a public good. They had to seek renewal, and they could be disbanded if necessary. (I know, who defines necessary?!)

How do we justify allowing some individuals to make major business decisions without fear of losing their own personal wealth as other individuals do?

Would a flat 10% tax and opt out clause apply to everyone including corporations?

I'm so lost on these issues when trying to talk to someone who has it in their head that most corporations are greedy and evil. Please help!

12-21-2011, 12:47 PM
Corporations are greedy and evil. They're legal fictions that give some people an advantage over others, and allow people to escape the consequences of their actions. However, that's advanced libertarianism, and we're not going to see the corporate structure dismantled anytime soon, unfortunately.

That said, Ron Paul is the only candidate even seriously addressing the issues of crony capitalism, so if you don't like corporations, there's only one ballot answer for you in 2012.