In a world without limited liability, investor Joe Blow is absolutely liable for the corporation's debts (even if it's simply a proportionate liability) and all

In a world without limited liability, investor Joe Blow is absolutely liable for the corporation's debts (even if it's simply a proportionate liability) and all of his assets are fair game towards the collection of said debts. Joe Blow doesn't even have to be very sophisticated. He could be a mid-level (or any level) worker who works hard to sock money away in his 401k. Everything is going along fine, until one of the company's his managed 401k invested in gets hammered with a massive judgment in litigation. Now, he and everyone else who invested in that company regardless of their size or wealth, is on the hook. Even if the small size of his investment simply means that he's only liable for a few thousand dollars, that's still one hell of a hit. And that's not even touching the issue of smaller firms (such as family businesses, startups that issue their employees stock benefits, or employee-owned firms) where the potential risk per individual investor goes up significantly simply because they own a greater proportion of the company. Every time I stumble across people arguing about limited liability (or corporate personhood... oh boy, does it seem like people confuse personhood with citizenship), I walk away with the impression that those seeking to end it don't really understand what they're asking for. It's sort of like opening Pandora's Box, but without hope lingering at the bottom.