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Proximalism · A reader
Page 11 of 25
Contents

Part III Economic Sovereignty, Enterprise and the Monetary Engine

Chapter 8Enterprise Without the Permission State

Private Market Certification, On-Chain Verification, and the Economics of Local Production

Essay

Why Do We Need Companies? Let's Abolish This Abomination of an Entity.

This Legal Fiction has outlived its purpose

There are few concepts in modern law and economics as assumed, as unchallenged, and as institutionalized as the legal entity we call a company, and yet when one steps back from the bureaucratic haze and the procedural entanglements, one is forced to ask, quite simply and quite seriously, whether the requirement to form a government-recognized company in order to carry out business is a necessity grounded in principle, or merely a ritual of submission to a system that long ago forgot who it was meant to serve.

The standard justification, repeated often by lawyers, regulators, and financial officers alike, is that the corporation exists primarily to shield personal assets from business liability, to provide a mechanism for capital formation through share issuance, and to establish a framework within which contracts, obligations, and governance structures can be formalized, litigated, and enforced—but even a casual examination of these rationales reveals that each of them could be accomplished through private agreement, contract law, and mutual consent without the need for a state-sanctioned entity that must be birthed through fees, filings, and bureaucratic acquiescence.

Consider this: if two or more individuals wish to enter into a business venture together, and they are fully capable of drafting, agreeing to, and signing a private contract that allocates shares, assigns duties, specifies capital contributions, and limits liability to the funds expressly committed to the venture, then what precisely is added—other than delay, expense, and submission—by requiring that this arrangement be filtered through the labyrinth of a Secretary of State’s office, complete with stamped documents, share certificates, and filing receipts?

Is it not logically possible, and indeed more efficient, to declare as a default rule that in any business or investment undertaking, the liability of the parties is limited to the amount of capital they have contractually committed, and that their personal residences, savings, and unrelated property shall remain beyond the reach of creditors or claimants absent fraud or malfeasance? Such a presumption would not only simplify commercial arrangements but would also render obsolete entire floors of government buildings filled with civil servants whose sole function is to approve or deny what private citizens have already agreed upon.

I say this not as an abstract theorist, but as someone who recently found herself navigating the arduous and humiliating process of creating a legal corporation—drafting the articles, printing share certificates, entering into formal bylaws, and submitting paperwork to government employees who, by their own admission, have the authority to process your application promptly or to bury it at the bottom of a pile, depending on their mood, their workload, or their whim. There is something deeply unsettling about the realization that one’s legal existence as an economic actor depends not on the consent of those with whom one contracts, but on the unpredictable discretion of a state office staffed by strangers.

And this is not merely a local or national defect; it is a pattern of governance that, when examined globally, becomes even more corrosive. A friend of mine who sought to obtain a passport in Indonesia recounted her experience of having to bribe each government worker at every window in the chain—one for the photo, one for the form, one for the stamp, another for the release of the document—each step infused with a silent threat: pay, or your documents will simply disappear into the abyss. And while we may flatter ourselves that our Western bureaucracies are immune to such explicit corruption, the implicit version—where delays are justified by complexity, and denials are issued with impunity—is no less oppressive.

Why, then, can we not simply establish a transparent system whereby government services are priced openly and timelines are guaranteed, such that, for example, a passport shall be issued within three business days or the government shall be required to outsource the task to private contractors at its own expense? And if the service is urgent, let the citizen pay more, openly and lawfully, not under the table, but as part of a structured, accountable framework that respects both time and money. This is not an argument against government entirely, but rather against the kind of government that hides its incompetence behind process and shields its workers from responsibility.

The tragedy is that this logic extends far beyond passports or company filings. It permeates every realm in which the state has inserted itself into the daily mechanics of productive life—zoning approvals that take years to finalize, environmental assessments that cost hundreds of thousands of dollars before a shovel may touch the soil, permit processes that require pages of documentation only to be told, months later, that the rules have changed or that an additional signature is now needed from another agency whose authority you never consented to recognize.

And let us be clear: this burden does not fall equally across society. For the average salaried worker who asks nothing more from the state than to be left alone, who pays taxes dutifully and avoids complexity, the intrusion may remain tolerable. But for those who build, who create, who take risks and employ others—those who dare to live lives that do not conform to the salaried rhythm of corporate servitude—the weight of the state becomes oppressive. These are the people for whom every step forward is met with a permit requirement, every innovation with a new regulation, every venture with a compliance form.

Is it any wonder that Ayn Rand’s metaphor of Atlas shrugging continues to resonate? The state demands that the most productive among us fill out forms, wait in lines, pay fees, seek permission, and prove legitimacy to people who themselves have created nothing. And we call this civilization.

So to return to the original question—why do we need companies?—the honest answer is that we do not. We need limited liability. We need enforceable contracts. We need capital clarity. But none of that requires a state-certified entity or the endless machinery that surrounds it. All it requires is trust, law, and freedom.

Let us say this instead: if a group of people decide to form a business, they shall do so by announcing who they are, how much they are contributing, and what their roles shall be. They shall make it known, publicly or privately, that their liability extends only to their capital. And if others wish to invest, to partner, or to contract with them, they may do so under the terms that have been declared.

That, in essence, is all that a company should be.

The rest—the filing systems, the government offices, the procedural delays, the fees, the building full of clerks—is a ritual designed not for protection, but for control. And it is time we said so plainly.

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