Friday, October 7, 2011

Corporations

There seems to be some misunderstanding of what Corporations are and what they have become as Mitt Romney illustrates with his "Corporations Are People" comment...



(Note: The Supreme Court ruled that restrictions on money that can flow to help/promote political campaigns is against the first amendment (i.e. money has free speech rights /first amendment protection)

The above statement made many people angry, including Stephen Colbert...



So the following are definitions and comparative examples to better understand the modern Corporate structure...

What is a Corporation?

Basic dictionary definition:
1
a : a group of merchants or traders united in a trade guild b : the municipal authorities of a town or city
2
: a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession
3
: an association of employers and employees in a basic industry or of members of a profession organized as an organ of political representation in a corporative state

Basic economic/business definition:

A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.


The most important aspect of a corporation is limited liability. That is, shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held personally liable for the company's debts.


Corporations are often called "C Corporations".


Compare and Contrast:

Context to understand some of the strange rules Corporations are allowed (more than an average person/family for sureb)...


In other words, besides free speech rights for corporate money, there are ways for corporations to get out of paying taxes and a whole bunch of other nonsense that seems to be just part of the reason for the present financial chaos.


Compare and Contrast - Case Study:


A Shell Corporation: Switching fundraising approach by creating a company (approx 4 mins into video) - this new company is called a 501 (c)4 - Allows donations from unknown donors , notice the dramatic increase in donations! (the example used is Karl Rove's Super Pac and a new one he created to shield it);


To compete with Karl Rove, Stephen creates his own Shell Corporation (this approach allows corporate donations in secrecy as their shareholders or customers may object to their practices)...





The following video is the amusing result of the above two videos...


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Added December 28 2011: Useful Information About Modern Corporations...



Documentary website

Watch full the documentary in 23 parts here.
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