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Who do you think ends up paying, if not the owners of the company? As long as the company isn't bankrupt, incorporation doesn't change anything. Full liability

• DannyBee 9y ago
  "Who do you think ends up paying, if not the owners of the company?" Errr, the company is liable as a separate entity from the owners. That's the whole point. Ignoring insurance, etc, the owners/shareholders will not be liable. The entity will be, completely and legally separate from the people you are talking about. If I own a company, and my bank account has a billion dollars in it, and the company has 1 million, and they end up fined for 2 million, even as the owner, i don't pay. "As long as the company isn't bankrupt, incorporation doesn't change anything." Of course it does. Your argument is a very indirect one, since the owners/shareholders quite literally don't pay. Thus, any payment by shareholders comes in lost money in the market or something, which is both a very indirect thing, and rarely matches the actual cost. "Full liability of owners isn't feasible in the current system, because it would expose every single investor to unlimited liability." The first part seems very disconnected from the second. The fact that every investor has unlimited liability does not make it infeasible. Maybe unwanted by the investor, but not infeasible. Right now, the risk of them going bankrupt/etc has been foisted on everyone else who they may injure. I get why the investors don't want that risk. That's their problem. I'd be fine with "LLC up to some amount of revenue/profit, you must convert to liable corp afterwards".