3 ms·
> 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 liab
by 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 agoNot 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 agoThat is fair enough. I did not realize this was enacted about 5 years ago.
- TylerE 3y agoThat seems to be New York State soexific( rather than federal.
- lazide 3y agoIt’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 agoIt's similar to the class of shareholders that have disclosure requirements (such as owning more than 10% of the shares).