What is the GOOD provided by allowing the formation of corporate entities?

Question

I get that they protect individuals from personal liability, but is that good?

Because:
Yes I would. I formed an LLC instead because it is economically advantageous. But if this weren't allowed then I wouldn't be competing against other LLC's and Corporations, so a sole proprietorship would be more viable.

Answer 1

The good is that people are more willing to start up businesses with liability protection and the more competition, the better the choice and prices in the marketplace.

I believe the first corporations were things like the East India Company which were extremely risky but extremely lucrative. They probably couldn't get enough money together if there was no limit to the possible losses. No corporations, no USA. Not sure if you consider that good. I do.

Answer 2

In today's sue happy ideology, a sole propriety compared to an LLC, would be fool hardy. Competition in the open market has nothing to due with your business structure however. All three of my Co's are LLC's for that very reason.

Answer 3

It is easier to mobilise a lot of funds, by forming a corporation. It is a collective responsibility.

Answer 4

well it is good in some ways, if you wanted to start a business would you do so knowing that you can lose your house and life destroyed for stuff out of your control;