Context of Question
In essence, allowing the IRS to take a huge chunk of one's money, in return for being able to use big boy words and "legal" documents, and business liability that may never be exercised.
Answer

So you seriously think that for hundreds of years, people just incorporate so they can use big boy words and 'legal' documents and so they can be taxed more? 

When there's a lot of people doing something, and it does not make sense to you, then the question should be: "what do they know that I don't know?", instead of presuming that they are vane, conceited or stupid. I suppose that's why you eventually asked this question and perhaps I and a few others here need not react to the negative assumption you seem to have by the way you asked it. 

There's lots of benefits and reasons for why a company is used as a vehicle for business for investors, employees and customers. For sole traders, there may not be a lot of benefits in most cases. That's why you should just trade as a sole trader if that's appropriate. However, as more and more people become involved and/or as more capital get invested and/or as the law begins to disadvantage other business-legal-structure options, then using a company begins to make more sense.

Do you have a different answer that might help the questioner? How would you answer this question?


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