A corporation is treated as if it were a person and only the corporation is liable for business debts and liabilities. Corporations have centralized management through a board of directors and officers. Moreover, if a partner or proprietor dies or retires, it often means the end of the business enterprise. Corporations can have an existence that survives their owners. For many years, state laws prohibited professionals from incorporating for a variety of reasons.
Professionals owe the utmost care to their patients.
But employees of a corporation owe a duty of care to the corporation. It was also felt that incorporation would have a profound effect on the relationship between professionals and patients. Patients would not be able to sue their professional and this would affect their relationship. This argument ignored the fact that in the field of healthcare, many professionals were employed by hospitals which were already corporations. By the early 1960's, the Internal Revenue Code had introduced a very important difference between corporations and partnerships or proprietors.