Legislators created a form of business called corporations to encourage people to engage in business activities.

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The law has created a form of business called corporations, which limits the liability of individuals for the risks involved in these activities. Legislatures thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if individuals were protected, and people would therefore be encouraged to engage in these activities.

Legislators Created a Form of Business Called Corporations to Encourage