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(IANAL. I'm not even from the US. Some of this information may not be very accurate) I'm not sure I can do it full justice either but here it goes - US bankrup

(IANAL. I'm not even from the US. Some of this information may not be very accurate) I'm not sure I can do it full justice either but here it goes - US bankruptcy laws are the oldest in the world. During a time when it's not uncommon for people to go to jail and be indentured to their debtors for their inability to repay the debts, US made a bold law that allowed for debt forgiveness and gradual repayment. US bankruptcy laws also made it possible to separate the property and responsibility of the company and that of the individual managing the company. This allowed for greater experimentation - because it's OK to fail without fear of persecution or losing all of the entrepreneur's property when a company fails. One more important factor is the ability of a company to declare bankruptcy and continue to operate - instead of getting divvied up to pay for the creditors. This resulted in companies that would otherwise be shutdown a second chance with restructuring and delayed debt payment. This is a long term view and is good for both the company and the creditors. It prevents short-term creditors from carving up the assets and closing down the company.

roel_v 8y ago
No they're not. The first 'corporation' as we'd recognize it today was the Dutch East India Corporation, which was founded before the US even existed. It already split liability of the corporation from that of the officers running it.
- HillRat 8y ago
  Yeah, but you had to get a Royal charter to create a limited liability company in those days. New York passed the first modern legislation allowing individuals to create LLCs/PLCs; the UK followed suit some decades later.
  - roel_v 8y ago
    While the Wikipedia article for 'limited liability' somewhat hints at NY being the first place where 'limited liability' was a legal concept accessible to all (although I'm not sure why that article does that - it's probably an unintended side effect of its main point being a history of Anglo-Saxon law regarding limited liability companies as we know them today), the French 'Ordonnance de Commerce' of 1673 (!) already codified limited liability partnerships in which investors were not liable for more than their contribution in the company. They could be founded by mere 'notarial deed' (although this translation doesn't really capture the nuances of the concept in civil law). Of course those were not the same as today's (Anglo-Saxon) LLC's and PLC's, but my point was that protection of investors in bankruptcy was something that emerged in the 17th century, at the very dawn of 'capitalism' as we know it today, and it's not something the English invented. I've thrown out most of my law school books on legal history and I don't remember all that much about the details, but any law school library has literally 100's of books on this exact topic, it's not like this is something controversial.
    - wutbrodo 8y ago
      I really wish the people that downvoted you had the maturity to respond with their (presumed?) rebuttal; I know little about the topic and was following the conversation with interest, but I have no idea of whether this comment's claims are sound or not, given the juxtaposition between the lack of responses and the downvotes. I mean, now I'm going to look up what I can about the topic, but it's just such a frustratingly immature habit that lowers the quality of discourse here. /rant over
      - EdwardDiego 8y ago
        I share your frustration. If they're wrong, please expand on why for the elucidation of others.
- distant_hat 8y ago
  There's a pretty interesting book on it "The corporation that ruled the world". It talks mostly about the British East Indian Company but that was modelled after the Dutch one.

roel_v 8y ago

No they're not. The first 'corporation' as we'd recognize it today was the Dutch East India Corporation, which was founded before the US even existed. It already split liability of the corporation from that of the officers running it.

HillRat 8y ago
Yeah, but you had to get a Royal charter to create a limited liability company in those days. New York passed the first modern legislation allowing individuals to create LLCs/PLCs; the UK followed suit some decades later.
- roel_v 8y ago
  While the Wikipedia article for 'limited liability' somewhat hints at NY being the first place where 'limited liability' was a legal concept accessible to all (although I'm not sure why that article does that - it's probably an unintended side effect of its main point being a history of Anglo-Saxon law regarding limited liability companies as we know them today), the French 'Ordonnance de Commerce' of 1673 (!) already codified limited liability partnerships in which investors were not liable for more than their contribution in the company. They could be founded by mere 'notarial deed' (although this translation doesn't really capture the nuances of the concept in civil law). Of course those were not the same as today's (Anglo-Saxon) LLC's and PLC's, but my point was that protection of investors in bankruptcy was something that emerged in the 17th century, at the very dawn of 'capitalism' as we know it today, and it's not something the English invented. I've thrown out most of my law school books on legal history and I don't remember all that much about the details, but any law school library has literally 100's of books on this exact topic, it's not like this is something controversial.
  - wutbrodo 8y ago
    I really wish the people that downvoted you had the maturity to respond with their (presumed?) rebuttal; I know little about the topic and was following the conversation with interest, but I have no idea of whether this comment's claims are sound or not, given the juxtaposition between the lack of responses and the downvotes. I mean, now I'm going to look up what I can about the topic, but it's just such a frustratingly immature habit that lowers the quality of discourse here. /rant over
    - EdwardDiego 8y ago
      I share your frustration. If they're wrong, please expand on why for the elucidation of others.
distant_hat 8y ago
There's a pretty interesting book on it "The corporation that ruled the world". It talks mostly about the British East Indian Company but that was modelled after the Dutch one.