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"e.g. bank is purposely setup as unlimited liability legal structure" Why would they want to do that?
by Phelinofist 4y ago
"e.g. bank is purposely setup as unlimited liability legal structure"
Why would they want to do that?
- traceroute66 4y ago> Why would they want to do that? To show the customer they're putting their money where their mouth is, i.e. that they are genuinely more interested in the long-term relationship than the pure commercial profitability of the client. Going for unlimited liability also focuses the mind of the bank's management. You can't make short-sighted decisions just because you want to boost your bonus. You have to genuinely make sound decisions with the bank and the bank's customer's in mind. Its very rare these days. Rarer than pure partnership legal structure which is already very rare. Almost all organisations these days opt to take the easier route and hide behind the corporate veil.