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Incorrect, the point of a corporation is to give its directors protection, and to give the corporation itself legal liability.
by mappum 12y ago
Incorrect, the point of a corporation is to give its directors protection, and to give the corporation itself legal liability.
- adventured 12y agoThe parent is not incorrect. Any corporate officer can be sued for actions they perform within a corporation. The government can also pursue you monetarily due to actions you perform as an executive. Just because the point of a corporation is to shield its directors / owners / executives, that has no bearing on whether it always does. Just because you have a corporation in front of you as an executive, that does not guarantee you won't lose in a court of law or that the government won't tear you to shreds. See: Jeffrey Skilling "Upon being sentenced, Skilling agreed to turn over $45 million to the Justice Department in conjunction with his conviction. The money is to be added to a restitution fund related to the civil litigation on behalf of employees and shareholders." http://www.chron.com/business/enron/article/Skilling-settles-employee-case-1493037.php http://www.chron.com/business/enron/article/Skilling-settles... Executives are very frequently responsible for all sorts of bad things they do in the name of a corporation. See: Worldcom, Adelphia, Enron, Tyco and countless other examples.
- FeepingCreature 12y agoCan you sell your stake in the corporation to itself?
- snowwrestler 12y agoYes, that's what stock buybacks are. But a corporation must have at least one human owner. That's not a rule, it's inherent in the definition of what a corporation is: a legal fiction to pool capital and liability. The implied question is, "pool it from where?" The answer: humans who have the legal right to own property and the legal duty to operate within the law.
- borng 12y agoHow's it different than a buyback like Apple's so fond of? In some jurisdictions you could also sell it to a wholly owned subsidiary of the parent corp.