24 ms·

The issue is limited liability. I don't think companies should shield stockholder, shareholders, or owners from any liability

tpmoney 2mo ago
While this sounds good in theory, I suspect the actual result would be much worse for justice in most cases. With the corporation acting as its own legal entity, if you are wronged, you sue and obtain justice from the corporation. If instead you needed to sue each and every shareholder to obtain their share of the liabilities, you'd likely spend many more years in court as each individual owner argues why they aren't personally liable for the given act because they didn't have knowledge, or control over the specific chain of events that caused you harm, and the courts have to sort out each individual case.
- necovek 2mo ago
  I think you missed the point: you can still take damages from the corporation, but if corporation cannot provide them (bankrupcy), owners are held liable for them instead. This is how non-LLC companies are treated. The instrument of Limited Liability exists to encourage business formation and risk taking for small businesses to kick off. The way large corporations and rich individuals would structure their projects into a number of corporation-owned LLCs is an obvious gap being addressed in law systems throughout the world.
  - cpburns2009 1mo ago
    That would make everyone who has a 401K, IRA, mutual fund, ETF or stocks liable for every action made by the companies invested in. That would be insane.
    - necovek 1mo ago
      I am not making a judgement call, merely describing what the GP meant. I do believe it is not as clear cut though — taking it to an extreme, imagine you directly invested in Epstein's sexual abuse business but only as minority owner. Should you be held liable or not? Now let's extend that to a pyramid scheme lending business. Or a company using child labour? When can we claim immunity and when not?
      - calvinmorrison 1mo ago
        the question is why should a legal fiction defy the natural liability. It is perhaps an example of 'common law' versus 'civil law'. A judge may find there is no personal responsibility of the shareholders for some crime, but the CEO is, but the shareholders, being partial owners of the business of course need to drum up the dollars to make a situation right be it a lemonade stand of a billion dollar corporation. As for claiming immunity, I don't see why you should not be responsible for the actions of a company that you own and use to make profit.

tpmoney 2mo ago

While this sounds good in theory, I suspect the actual result would be much worse for justice in most cases. With the corporation acting as its own legal entity, if you are wronged, you sue and obtain justice from the corporation. If instead you needed to sue each and every shareholder to obtain their share of the liabilities, you'd likely spend many more years in court as each individual owner argues why they aren't personally liable for the given act because they didn't have knowledge, or control over the specific chain of events that caused you harm, and the courts have to sort out each individual case.

necovek 2mo ago
I think you missed the point: you can still take damages from the corporation, but if corporation cannot provide them (bankrupcy), owners are held liable for them instead. This is how non-LLC companies are treated. The instrument of Limited Liability exists to encourage business formation and risk taking for small businesses to kick off. The way large corporations and rich individuals would structure their projects into a number of corporation-owned LLCs is an obvious gap being addressed in law systems throughout the world.
- cpburns2009 1mo ago
  That would make everyone who has a 401K, IRA, mutual fund, ETF or stocks liable for every action made by the companies invested in. That would be insane.
  - necovek 1mo ago
    I am not making a judgement call, merely describing what the GP meant. I do believe it is not as clear cut though — taking it to an extreme, imagine you directly invested in Epstein's sexual abuse business but only as minority owner. Should you be held liable or not? Now let's extend that to a pyramid scheme lending business. Or a company using child labour? When can we claim immunity and when not?
    - calvinmorrison 1mo ago
      the question is why should a legal fiction defy the natural liability. It is perhaps an example of 'common law' versus 'civil law'. A judge may find there is no personal responsibility of the shareholders for some crime, but the CEO is, but the shareholders, being partial owners of the business of course need to drum up the dollars to make a situation right be it a lemonade stand of a billion dollar corporation. As for claiming immunity, I don't see why you should not be responsible for the actions of a company that you own and use to make profit.