You just think you ran me off! Nyah nyah na na na --
Basic thesis: a corporation is a creature of government, and as such is as subject to regulation by the government (for whatever reason) as the IRS is.
Secondary observation: That's how they started out, and that's how they still function. The earliest corporations were vehicles of conquest, used by the governments that chartered them to avoid spending government funds, using private investment instead.
I got some rather snotty flak on both counts. Sorry; I don't have the direct quotes. I read from the Web, and did the Mark All Read button without saving the comments; so corrections requested.
One comment approximated a rather odd view of history. Guilty, your honor. And since I'm neither infallible nor especially diligent, I decided to go hunting through the Web. Hey, if I'm wrong, I'd rather know it than not ---
And what I found tends to reinforce my views rather than contradict them. Let's start with the Great Grey Britannica:
"When a group of Athenian or Phoenician merchants pooled their savings to build or charter a trading vessel, their organization was not a corporation but a partnership; ancient societies did not have laws of incorporation that delimited the scope and standards of business activity."
"The company or corporation, unlike the partnership, is formed not simply by an agreement entered into between its first members; it must also be registered at a public office or court designated by law or otherwise obtain official acknowledgment of its existence."
(From the entry for Business Organization)
Hm. There's also the Definition according to Investor Words:
(a little US-centric, but if you'll check out the Britannica article you'll see that other Western countries have the equivalent.)
That's as far as I got. If anyone (most especially the attorneys who hang out here) can get something that contradicts this, I'd be fascinated to see it; but so far, I consider my thesis proved: A corporation exists at the pleasure of Government (issuance of a Charter.) Furthermore, the distinction between a Corporation and all other forms of organization rests on the notion of limited liability which can only be conferred by Government.
Somebody took issue with that last. IIRC, it was something like: A group of people can form an association, issue stock, agree that liability of the owners extends only to the extent of their investent, and require suppliers and/or other contractors to agree as a condition of doing business.
Well, yeah, as far as it goes. You forget that there's people around who aren't signatory to the contract, but have an interest (sometimes a compelling one.) Hypothetical example (Not):
The Company of Friends of Luther of the Bridge is running a chemical plant. To save money on waste disposal, they've been dumping methyl hydroxyl crapazine in the river, resulting in an epidemic of two-headed babies and a 40% reduction in production efficiency of the other plants downstream. The affected parties sue.
The Company of Friends explains that their contract with one another binds them to pay out only what they've invested, and not a penny more.
How's the Court gonna rule? How are YOU gonna rule? Hey, Eric, want to comment on this case?
Bullshit. The only way they're gonna get away with that is if the fix is in to start with. You have to have (a) the Government running the Court system and (b) Government support (in the form of regulations the Court follows, i.e. laws) for the notion of Limited Liability.
I repeat: a corporation -- whether it's Microsoft, GM, or Fred Farthingale & Associates Pty. Ltd., Panel Beaters Since 1951 -- is as much an organ of government as the Department of Health & Human Services, and just as subject to regulation by superior (administratively) organs of government as any other. Implementation details differ -- GM is (arguably) on a longer leash than the INS, for example -- but the principle remains.
And how did it get that way? Well, that starts getting into the peculiar view of history -- and since this is already wasting space on Arnold's server, will be deferred to next time. Unfortunately it doesn't have Marvin in it.