Frankenstein<\/a>\u00a0movie.\u00a0\u00a0But we know the story of the mad scientist who stiched together body parts, then found a way to \u201cshock\u201d them into life.\u00a0\u00a0\u201cHe\u2019s Alive, He\u2019s Alive!\u201d is the famous line \u2013 followed by \u201c\u2026now I know how God feels,\u201d foreshadowing the catastrophic outcome of his experiment.\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\nBut we (our society) does this process all the time.\u00a0\u00a0It doesn\u2019t happen in the dungeon of some dark castle on the hill. Instead, it’s in Secretaries of State offices in state capitals all over this land.\u00a0\u00a0It\u2019s the process of bringing a new entity to legal \u201cexistence\u201d, creating a new legal \u201clife\u201d where there wasn\u2019t one before.<\/p>\n\n\n\n
It almost sounds like magic:\u00a0\u00a0\u201cAbracadabra\u201d, and something exists with legal rights and responsibilities.\u00a0\u00a0We even have a magical sounding term for it:\u00a0\u00a0incorporation<\/em>.\u00a0\u00a0That derives from the Latin term\u00a0corpus\u00a0<\/em>meaning “body”.\u00a0\u00a0From that root we have the terms: corpse (a dead body), corps (lots of live bodies), corporate (bodies organized in some fashion) and corporeal (dealing with the body, not the spirit).\u00a0\u00a0So to \u201cincorporate\u201d something is actually to \u201ccreate a body\u201d \u2013 \u201cIt\u2019s Alive, Alive!\u201d\u00a0<\/p>\n\n\n\nBut there\u2019s no magical conjuring going on in the basement of the Secretary of State\u2019s office at 22 North 4th St in Columbus. Nor is there a \u201cmad scientist\u201d waiting for lightning to power a \u201ccreation machine\u201d. Fill out the necessary legal papers, and submit $99 ($150 if you\u2019re in a hurry) and you can create a corporation, an actual entity in the eyes of the law: It\u2019s Alive, Alive!\u201d<\/p>\n\n\n\n
Incorporation<\/h3>\n\n\n\n
Corporations have been around since the 16th century. And they add strong value to the economy. They allow real individuals to combine their wealth and \u201crisk it\u201d on some commercial enterprise. By combining, the real individuals protect their personal wealth, only risking whatever they invested in the \u201ccorporation\u201d. So if the enterprise, the corporation, were to fail (die), the most the investors would lose would be all that they invested. <\/p>\n\n\n\n
This is different than a partnership or a solely owned business, where the owner(s) are wholly liable for all of the businesses\u2019 debts, all the way to their own personal fortunes. Partnerships and solely owed businesses aren\u2019t entities in the same way that corporations are. <\/p>\n\n\n\n
In fact, corporations can \u201ctake the fall\u201d if they go bankrupt, rather than take all the investors down with them.\u00a0\u00a0Partnerships and solely owned businesses cannot. No legal “being” is created to \u201ctake the fall\u201d for the partners or owners.\u00a0\u00a0That\u2019s why one form of incorporation is called an LLC, Limited Liability Corporation.<\/p>\n\n\n\n
You are now thinking:\u00a0\u00a0what sin did I commit\u00a0to end up in this “Intro to Commercial Law” class on the \u201cOur America<\/em>\u201d online law school?\u00a0\u00a0But understanding the legal standing of corporations is important this week. That’s because Cyrus Vance, the District Attorney of Manhattan, New York, is about to bring criminal charges against the Trumps.\u00a0\u00a0And these first ones aren\u2019t probably against Chief Financial Officer Allen Weisselberg, or Eric, Don Jr and Ivanka, or even old Number 45 himself.\u00a0\u00a0These charges are against the \u201cTrump Organization \u2013 Incorporated\u201d.\u00a0\u00a0The organization, a legal \u201cbody\u201d is going to be charged with crimes.<\/p>\n\n\n\nEnron and Andersen<\/h3>\n\n\n\n
\u201cCorporations\u201d can\u2019t go to prison. So the ultimate penalty for a corporation’s crime, is to take the lifeblood of that paper incorporation \u2013 money. Corporate fines can be such that the corporation ceases to exist \u2013 ask the Arthur Andersen Company, one of the \u201cBig Five\u201d accounting firms in the United States until 2002. Arthur Andersen Company hid evidence as part of the Enron scandal. The Corporation was found guilty and sentenced to the maximum $500,000 in fines and five years\u2019 probation.<\/p>\n\n\n\n
You remember Enron, right?\u00a0\u00a0Enron was a natural gas and electricity \u201cbroker\u201d<\/em>, that m<\/em>ade energy trades into financial instruments (derivatives) t<\/em>o trade on Wall Street.\u00a0\u00a0They hid incredible losses from their investors ultimately amounting to $74 billion. They also lost their employees the entire pension investment.\u00a0\u00a0Enron itself declared bankruptcy \u2013 the \u201ccorporation\u201d died.<\/em><\/p>\n\n\n\nThat, along with a series of other crimes committed and multiple millions of dollars in fines, put Arthur Andersen out of business as well.\u00a0\u00a0If you were an officer of that corporation you might lose your business. But it\u2019s probably better than getting charged with crimes yourself. Ask Ken Lay and Jeff Skilling, the chief officers of Enron.\u00a0\u00a0Both served several years in Federal prison.\u00a0\u00a0\u00a0The Arthur Andersen Company dissolved, but part of it was \u201creincarnated\u201d as Accenture.\u00a0\u00a0It is incorporated and headquartered in far away Ireland.<\/em><\/p>\n\n\n\nFirst Step<\/h3>\n\n\n\n
A Manhattan criminal trial against the Trump Organization could require the dissolution of the corporation itself. Oh, did I forget to add that when a corporation is indicted for crimes, all the folks that loaned money to the corporation want their money back – now? We know that the Trump Organization is famously indebted to multiple banks. And, as the Enron case proved, just because the corporation is charged, doesn\u2019t mean that the individuals that ran the corporation can\u2019t be held personally liable for crimes. <\/p>\n\n\n\n
The corporate charges might just be the first step in criminal actions.<\/p>\n","protected":false},"excerpt":{"rendered":"
Frankenstein Most of us haven\u2019t seen the original black and white \u00a0Frankenstein\u00a0movie.\u00a0\u00a0But we know the story of the mad scientist who stiched together body parts, then found a way to \u201cshock\u201d them into life.\u00a0\u00a0\u201cHe\u2019s Alive, He\u2019s Alive!\u201d is the famous line \u2013 followed by \u201c\u2026now I know how God feels,\u201d foreshadowing the catastrophic outcome of … Continue reading “It\u2019s Alive, Alive”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-4398","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nIt\u2019s Alive, Alive : Our America - 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