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I'm a little fuzzy today. Major headache. I hope I can do this justice.
Without going into a full lecture, :) (I can talk a corpse to death if I'm allowed), a corporation is just a legal identity for a group of people with a common goal. It can be business or non-profit--PETA is probably a corporation, for instance. Actually, a single person can become a corporation. There are tax benefits to doing so, although sometimes they are liabilities. Basically, if an individual owns a business as a sole proprietor or as on partner in a partnership, then the company's profits and losses are his, straight out of his own personal ledger and bank account. His salary is only the profit of the business.
A corporation is different. It sets up a separate company, and the owners become "shareholders" of the company, so that their expenses and the company's are completely separate. Incomes, too. A shareholder gets paid dividends (just meaning his share of the profits), and holds stock that he may or may not be able to sell (depends on the corporation's charter) at will, and if he works for the company he can get a salary. Even if the corporation is only one person, the income and expenses are still not his--they belong to the corporation, and the shareholders (even though he is the only shareholder). He can get paid a salary, but he can't just pocket the profits. With one owner, of course, he can just take profits whenever he wants, but they would be taxed as his own personal income, and he has to file the right paperwork.
Anyway, the more the merrier. If youu have ten owners, each is a shareholder, each can get a salary, and none of their finances are exactly the same as the corporation's. This can help them--if the corporation collapses, they only lose their shares and their salary and the value of their stocks (considering they had to buy the stocks, that's not insignificant). But it can also help the corporation. If one of the shareholders goes bankrupt, his creditors can't sieze the corporation and put everyone else out of business (or out of work, since they probably have employees other than the shareholders.
Then there are publicly held corporations, who sell stocks on Wall Street or the NASDAQ. The shareholders are everyone who has stock, although most of them own too small a share to have any influence over the company. The major shareholders own the company, hire the CEO to run it, vote on policy for the company, and get large dividends from the profits, whereas the smaller investors get smaller dividents.
So what being a corporation basically does is allow the individuals to be separate from the business, which lets them have protect their money, and the corporation, and get some interesting tax breaks in the process.
Now, your questions. The shareholders can be held responsible if they do something criminal. If they voted to kill someone, for instance, they could be tried for murder as individuals. It doesn't protect them that way. On the other hand, if they simply vote for a policy that leads to a death, then none of them individually has done anything (provably) wrong, but the corporation has, and it can be held liable (usually only in a civil court, but not always). That can punish the shareholders through fines, and can even break them if the corporation is destroyed. Think of the giant class action suits against tobacco and asbestos, as well as smaller suits against McDonald's for their coffee temperatures. The shareholders can lose money if they are negligent--that's exactly why Republicans want tort reform so badly. Tort reform means a corporation can get away with more and the shareholders aren't responsible.
And again, the shareholders are not exempt from being punished individually. If they do something illegal, they can be punished. If the company is too large, this makes no sense, of course. You can't put everyone who owns Exxon stock in jail for an oil spill, and think of the number of court cases that it would take to do so. But you can fine the corporation collectively, and that costs the shareholders money.
Also, there are rules about corporate responsibility, so there are things a shareholders' convention can't vote to do, and there are things that the people who run the company can't do. If they try, they can be stopped, and if they succeed, they can be punished individually--especially those running the company. This obviously happens more to smaller corporations, but for instance I work for a tire company. If we illegally dump tires, our shareholder and the managers of the company (in this case they are the same people) could go to jail personally for it.
So a corporation status doesn't mean that the individuals are immune from the law. It only helps streamline a lot of things. And the corporation doesn't have all the rights of an individual, even if the corporation is made up of individuals and their rights are protected. If you are limiting a corporation's right to speech, for instance, then the individuals are hampered, but in some cases the restrictions are still valid, because the corporate voice is not identical to the individual's voice. It has to be settled in courts and with legislation.
Also, of course, bad publicity can hurt a corporation, so if they advertise for something unpopular they can lose money, and that's a penalty.
Basically my take on corporations is that they aren't good or bad or indifferent, they just exist, and we have to deal with them as they are. They employ a ton of people, and some make tremendous advances in our quality of life, even our life itself. Where would we be without IBM and Microsoft, for instance (and if not them specifically, at least the industry and the money they invested). But they also have tremendous wealth and power to harm. What we need are more legislators willing to limit THAT power, without necessarily destroying the good parts.
And that's what we don't have. As you point out, courts and legislators are too concerned with giving corporations rights, and not concerned enough with limiting what they can do. Obama talked about limiting banks, for instance, and that's a great step to take. The trend lately has been towards deregulation, and that has caused most of the economic problems we face these days, and corporations, who are by definition only interested in making a profit (aside from non-profits), spend a lot of money preventing those regulations, though, because while they make sense for the economy, they might cost that corporation money.
Anyway, told you I was fuzzy-headed now. That's what corporations are, and that's how they aren't completely exempt from responsibilities, but they are too exempt for this nation's good. Since Reagan, they have been deregulated too much. Clinton had a mixed record--he tightened some of their responsibilities, but loosened others. What we need are more people to regulate.
Keep in mind, too, that a corporation is just a legal structure, and covers anything from an individual store owner to the Fortune 500. If you simply did away with the legal structure, all of those companies would still exist in some form, but they might be harder to regulate. It would probably hurt us far more than help us. So anti-corporate sentiment needs to be about limiting them, not destroying them. :)
Sorry so long. I'll understand if no one reads it. On a better day, I'd edit it massively. :)
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