Let’s think about this: what kinds of things can a sovereign state do?
I just re-read it again. You need to!
You’re confusing business corporation with municipal corporation. They are not the same thing! Generically a corporation is any group authorized to legally act as a single entity. There are many kinds of corporations. A municipal corporation is a corporation to organized a district inside a state inside the United States. Most U.S. cities and counties are municipal corporations of some form or the other. My hometown went from unincorporated - no city government therefore no legal way of acting as a unit to incorporated - a corporation now capable of acting as a unit having a police force, taxing power, etc. in 1948. The act (Again read the act!) dissolved the charters of Georgetown & Washington City and absorbed them into and under one municipal government called the District of Colombia which out of habit just say Washington. Read the act!