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Companies are people, legally speaking, but I see your point. See ours: Imagine yourself as a company and the same debt equation applies. Companies, like you, need tools to produce goods and maintain their operations. You, if you're a programmer, need a computer. You don't have $1000 to buy one, but you have a credit card. You know, you can bill your hours out at say, $100/hr writing code. You need to write code for 10 hours to pay for the machine, but you don't have $1000 to buy the machine. So you put $1000 on a credit card at 20% interest, buy the computer and then bill 100 hours on it @ $100 / hr = $10,000 in just one month. You incurred a little bit of debt, bought something worth a lot, but worth a lot more to you because you can leverage that tool to make more money than it cost to buy the tool. Think of debt as leverage. It's a little bit of money pressing down on a lever to lift more money into your pocket. If you only use that leverage to buy assets that help you make money (fairly easy) or increase in value at a rate greater than the interest rate (difficult, risky, speculative), then your net worth will continue to grow. That college degree in a practical field like engineering is an asset because you will leverage it to earn more money over your lifetime than you would without that degree. Compare this to a degree in the proverbial "basket weaving." You, in your lifetime, will never weave $400,000 worth of baskets you'd need to pay for that University of Chicago degree. That degree is a liability that will follow you, perhaps your entire life and might make your life worse than it would be had you never gotten it at all. You'll resent that degree so much you refuse to work because every penny goes to some bank that sold you a worthless piece of paper for $400,000. |
Companies are legal entities which can sign contracts, hold debt, open bank accounts, etc.
So are government agencies, unions, churches, mosques, guilds, charities. Does that means these are all people, legally speaking? For some reason nobody says 'the IRS is a person, legally speaking'.
Companies cannot marry, vote, file taxes as a human, get a passport or driver's license etc, because they are not human, legally speaking. They're just legal entities, as people also are, but of different types.
Don't get confused about the words used in the legal world around 'natural persons' etc; legal usages of words don't carry their common meaning and there are lots of examples of this you know.