Old Guy:

I agree with most of your 8-Jan 06:09 post as well.

The treatment of a corporation as legal individual was originally to limit the liability of the shareholders and owners of the corporation. These is necessary to make it safe to undertake the risk involved, I suppose.

A corporation entity also has an on-going existence (perpetual lifetime) so that its assets aren't all re-allocated and re-taxed everytime one generation of executives dies and another takes over. This allows the accumulation of capital, for example, across the spans of people's individual lives, not interrupted by individual decease.

The third major rational basis for the "legal entity" shtick is maximizing profits in the interest of shareholders. This is an incentive to investment, and not bad in itself, except that it goes way out of balance.

Henry Ford, while running the Ford Motor Co. had a strategy to get more people to buy Fords, by reducing his prices AND reducing dividends. He was sued by his then brother-in-law. Mr. Dodge, who won the suit and founded a competing motor company with the proceeds of his success.

People have been forming corporations to undertake risky ventures since 1350 or so.

Here's an article on the fiction of corporate personhood which you may find interesting.

A