4 ms·

if there's any money at all, employees get their pay. Shareholders can be forced to go in their pockets and pay employees wages due. I don't know of this happe

if there's any money at all, employees get their pay. Shareholders can be forced to go in their pockets and pay employees wages due. I don't know of this happening to a large corp, but if a local restaurant goes bankrupt, or a local construction company, and the owner is not also bankrupt, they can be forced to pay employees. Usually they are also bankrupt. Not sure if those debts survive through personal bankruptcy. You may be referring to employees losing retirement or other benefits like that, but the worst of those loopholes have been closed (the pension can't be in the company's own stock, that type of thing)

chii 3y ago
> Shareholders can be forced to go in their pockets no they cannot. Shareholders can only lose at most the capital they put in originally - they cannot be liable for additional debt. > the owner is not also bankrupt, they can be forced to pay employees. That would be because the owner mixed their own personal wealth with their business (e.g., as a single entity), instead of a limited liability company. Therefore, any assets the owner has is subject to be sold to pay the debt of the business. It's why only small businesses, owned by a single owner (who would have nothing else) is done this way (cheaper administratively i presume).
- lazide 3y ago
  Not true in many locations specifically for unpaid wages: https://cmmllp.com/shareholder-liability-for-unpaid-wages/#:~:text=If%20payment%20is%20not%20made,his%20or%20her%20employment%20terminates https://cmmllp.com/shareholder-liability-for-unpaid-wages/#:....
  - chii 3y ago
    That is fair enough. I did not realize this was enacted about 5 years ago.
  - TylerE 3y ago
    That seems to be New York State soexific( rather than federal.
    - lazide 3y ago
      It’s usually state labor laws. Some states don’t have it, most do. Wages are treated as a special case, often with these type of forced payout clauses and even criminal penalties.
  - thrwy_918 3y ago
    "top 10 shareholders" is quite a specific class of shareholders
    - chii 3y ago
      It's similar to the class of shareholders that have disclosure requirements (such as owning more than 10% of the shares).

chii 3y ago

> Shareholders can be forced to go in their pockets no they cannot. Shareholders can only lose at most the capital they put in originally - they cannot be liable for additional debt. > the owner is not also bankrupt, they can be forced to pay employees. That would be because the owner mixed their own personal wealth with their business (e.g., as a single entity), instead of a limited liability company. Therefore, any assets the owner has is subject to be sold to pay the debt of the business. It's why only small businesses, owned by a single owner (who would have nothing else) is done this way (cheaper administratively i presume).

lazide 3y ago
Not true in many locations specifically for unpaid wages: https://cmmllp.com/shareholder-liability-for-unpaid-wages/#:~:text=If%20payment%20is%20not%20made,his%20or%20her%20employment%20terminates https://cmmllp.com/shareholder-liability-for-unpaid-wages/#:....
- chii 3y ago
  That is fair enough. I did not realize this was enacted about 5 years ago.
- TylerE 3y ago
  That seems to be New York State soexific( rather than federal.
  - lazide 3y ago
    It’s usually state labor laws. Some states don’t have it, most do. Wages are treated as a special case, often with these type of forced payout clauses and even criminal penalties.
- thrwy_918 3y ago
  "top 10 shareholders" is quite a specific class of shareholders
  - chii 3y ago
    It's similar to the class of shareholders that have disclosure requirements (such as owning more than 10% of the shares).