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The company is going bankrupt, so the effective "fine" to the shareholders is 100% of their equity. That's the point - "limited liability" just means it can't b
by tomp 7y ago
The company is going bankrupt, so the effective "fine" to the shareholders is 100% of their equity. That's the point - "limited liability" just means it can't be more than 100% of equity.
- cies 7y agoGood point. I should have added: 4) When the fine is larger than the company's worth, collect it from the shareholders.
- tomp 7y agoThen noone would invest. Don't forget that often "shareholders" are index funds, pensioners, school endowments... No, the correct solution already exists - the criminal justice system going after criminals that did crime - it just doesn't work very well (especially when criminals are rich - e.g. Epstein - no need for "limited liability company").
- cies 7y agothere are so many ways a huge corp can commit crimes while individuals can all use the "plausible deniability" card. also often the crime is committed by the company as a whole, while no individual did something wrong. > Then noone would invest. i disagree, you just only invest in ethically sound endeavours. and thats exactly what im trying to achieve by my suggestions. starve bad-business from investment and/or people willing to take ownership. and make investors also do dilligence on the ethical side, instead of only an assessment of books+team+product+market.
- vorpalhex 7y agoHow is any investor supposed to be able to do any level of research approaching that depth, much less a college kid or your grandparents? "Sorry Grandpa, I know you thought that company was on the up and up, but we're gonna have to take your retirement."
- cies 7y agoexactly. no boundless protection for your capital/investments. you can do all kinds of other investments! but this kind of structure pushes corps to become "walk over dead bodies" evil, and investors not giving a shit.