>>410023
I have an accounting background.
I will never forget when I first learned of "Corporations" while in College studying Accounting.
Up until then we had only concentrated on Sch C type companies/businesses. That is a regular privately held company. This was the original and most simple form of a business entity. It was owned by one person and its income and profits were reported on that persons tax return (on Schedule C, thus we call it a Sch C company). This made sense to me. You started a business and paid taxes on your individual tax return on the profits from that business. The profits that you then used to live off of. Then we studied Partnerships - same concept except multiple owners that shared profits based on their partnership agreement, which each then reported on their individual tax returns (Schedule K).
Then when we were introduced to Corporations it blew my mind that you could actually create an ENTITY that acted as a PERSON when it relates to our tax law. In other words, the Corporation itself is issued it's own id number (FEIN) similar to a SS number in order to file it's taxes using that identifier. Then the shareholders were also taxed at their own tax level (their own 1040) via dividend income. This was so foriegn to everything we had learned previously I couldn't beleive it. The way it was sold to us in school was that as companies grew larger, their liabilities also grew and thus their exposure to lawsuits made the owners vulnerable because if you sue a Sch C company you can also bring into the lawsuit all the assets owned by that individual that owns that Sch C. Thus, for example, a doctor making a LOT of money and owning a LOT of personal assets could be sued for everything he/she owned.
Thus the corporation was created to promote what's called "limited liability". If you sue a corporation you are limited to only the assets of the corporation and not it's owners!!
Now of course we have LLC's and LLP's - Limited Liability Corps, Limited Liability Partnerships. Now they have both the benefits of limited liability AND no double-taxation like a regular corporation.
THE LAW IS MANIPULATED TO HELP THE RICH AND TO PROTECT THEM ONLY!!!!
That is what I have learned as an accountant.