Because I am still interested in this issue, and because I think this thread is a good discussion of the topic and thus gives us a good foundation, I'd like to continue the discussion here. Here are a couple more posts of thoughts I had on corporations which were derailing another thread:
My view on corporations is this: in a free market, a corporation is just one way people arrange each other contractually. A publicly-held corporation is essentially just a massively multiplayer partnership.
It is valid for people to choose to associate with others in certain ways and at the same time not to associate with them in other ways. For example, I can choose to buy a taco from Taco Bell without becoming responsible for any of Taco Bell's actions, including what they do with my money. Taco Bell can choose to provide me with shelter, or even lodging, without becoming responsible for any ridiculous or destructive actions I may take, even while occupying their shelter.
Now I will even make a terminological concession to you, since it may make my position easier to understand. You may be of the mind that being an "owner" entails, by the very definition of owner, that you must be liable for what your property does. Thus, a partner/shareholder in a partnership or corporation must of necessity be liable, fully and completely, for whatever damages or debts that corporation causes/enters into. Fine. Then call them something else. Let's not call a shareholder an owner. He is just some kind of investor or creditor. He has a contract with you that he has given you money, and in return he gets a share of the monetary profits or losses you make that emulates what he would get if he were an owner. There we go. I would think that would solve your objection. Certainly a creditor/investor cannot be held liable for the party he loaned to just because he gave them a loan. Likewise if he happens to have made a more complex monetary arranegement wherein his payback is in terms of virtual ownership rather than a simple rate of interest.
Corporations cannot exist in a free market, and anyone who insists otherwise doesn't understand what incorporation is. This is not a matter of opinion, this is a matter of definition. Arguing with this is like arguing with physics.
Even if private, voluntary actions create a perfect clone of a corporation, it would still not be a corporation, as the very definition of incorporation is an act of government to limit the liability of an organization. You could call it a corporation but you'd be redefining the term.
There'd also be no reason for anyone to accept such ridiculous terms, but that's another conversation entirely. Incorporation is an act of government, full stop.
A corporation is not a business and it is not an organization. It is a state-privileged entity created by state action.
If you all want to throw hard definitions of terms into ambiguity, that's your prerogative, but I can't follow you there.
It sounds like you would like to allow people to contract with each other to form organizations to their liking, in whatever manner they choose. That is also what I would like to allow. Certainly I see no need for a state to issue special organizational charters -- not to churches, not to companies, not to charities, not to families. You also see no such need and would like it to stop.
So what is the crux of our disagreement? You say that only orgs with state-granted licenses can be rightfully called "corporations". (I wonder, paranthetically, if only couples with state-granted licenses can rightfully consider themselves married, and if only religious groups with state-approved articles of formation can consider themselves true churches. But that is a sidenote.) I, on the other hand, wrongfully, ignorantly, and outrageously abuse the sanctity of the English language and all standards of decency by calling organizations that act like corporations, "corporations." Organizations without the state's holy benediction! How dare I, I ask myself! Ah well, it matters not, because I seriously don't care. If calling them Massively Multiplayer Partnerships is what it takes to preserve the integrity of the English language, which I dearly love, the greatest language on the face of the Earth!, then so be it. I will gladly call these non-state-incorporated businesses by whatever term you and other qualified language guardians may declare most suitable.
See, I just want humans to have the freedom to contract, and business to have the freedom to run. The corporate/whatever-you-want-to-call-it form happens to have shown itself over the last 400 years to be a highly effective way to get things done. Let's let the people get things done! Eh? As long as they are not aggressing against anyone else, let business be business. Business puts food on your table, a car on your driveway, and we will put a flying car on your roof someday if you will just stop hamstringing and micromanaging us.
