Limited liability in a free market society...

[Tpoints]

The liability shield is the main PURPOSE of the corporate entity. It allows them to gather vast sums of money essentially anonymously. So courts rarely pierce it. And it applies to officers and directors as well. Of course they still have individual liability if they personally act criminally, but that's not the big problem.

To me the big problems with the corporate business form are:
1. Those who profit from the activity of the entity are shielded from responsibility
2. The entity is immortal
3. No human being has a public reputation intertwined with the activity of the entity
4. Separating ownership, management, and legal responsibility into separate parts encourages reckless activity, short-term thinking, lack of loyalty to the customer and employee, lack of concern for the community, and insularity of the real owners.

There are more . . .

It's not immortal, bankruptcy and solvancy is death.
Those who profit from activity are shielded from responsibility, that is definitely a problem.
Maybe shareholders would not have their reps tied to the entity's activity, but CEO and board usually are.
Yes, separating responsibility from rights should never happen, this is no different regardless of what entity, group, or purpose of either are.

[erowe1]

Depends on what you mean by a free market and in what form the church would exist. I think only human beings should be able to own property or enter contracts. Certainly groups of people could get together and own property jointly and call it a church. But can they create an artificial entity that can itself own property, sign contracts, etc? I don't know why that would exist in a free market.

I can't imagine how it could not exist, unless the state forcibly banned it.

There would be people who would want to have churches that owned property and had officers who could sign contracts on behalf of the body. There would be other people who would willingly engage in business with them. So voila! There's a corporation.

[Tpoints]

I can't imagine how it could not exist, unless the state forcibly banned it.

There would be people who would want to have churches that owned property and had officers who could sign contracts on behalf of the body. There would be other people who would willingly engage in business with them. So voila! There's a corporation.

yes, the state should forcibly ban any person from using an entity to fraudulent escape responsibility. Yes, there are people who can willingly sign away their rights or allow another to be free of responsibility, that would be legal, though very stupid.

[Bohner]

I can't imagine how it could not exist, unless the state forcibly banned it.

There would be people who would want to have churches that owned property and had officers who could sign contracts on behalf of the body. There would be other people who would willingly engage in business with them. So voila! There's a corporation.

It's not a corporation because any non-consenting 3rd party that gets harmed as a result of negligence can still go after the individual responsible. In the current climate, they can only go after the corporation while the people pulling the strings are shielded from liability.

[Tpoints]

It's not a corporation because any non-consenting 3rd party that gets harmed as a result of negligence can still go after the individual responsible. In the current climate, they can only go after the corporation while the people pulling the strings are shielded from liability.

If you can prove if it was the string puller's act or inaction caused the corporation's acts/harm, can't you go straight for the puller? In the criminal context, that's always the way.

[Bohner]

First of all who is teaching you about private equity? Robert Reich? That isn't what Bain did/does. Think for a second about why the bolded isn't true. Banks have to loan Bain the money. They aren't going to loan Bain money if they don't expect to get paid back.

Yes, no shit, but should the situation arise where they don't get paid back, in an unlimited liability setting, they can go after the people pulling the strings. They can't do this when the people pulling the strings are shielded with limited liability. It's pretty simple, bank loans corporate person money, corporate person uses some of that money to pay the men pulling the strings. Corporate person goes bankrupt, even though some of that money went to the men behind pulling the strings, they can't be touched.

Hell, it basically creates the incentive for a corporation to accumulate as much debt as possible before bankruptcy because the people pulling the strings are not liable for a penny of it.

I really don't see how this is in any way consistent with free market principles.

I'm not saying Bain did this all the time btw.

[erowe1]

It's not a corporation because any non-consenting 3rd party that gets harmed as a result of negligence can still go after the individual responsible. In the current climate, they can only go after the corporation while the people pulling the strings are shielded from liability.

I don't think that means it's not a corporation.

Saying that corporations wouldn't exist unless they were registered by the government and regulated by the same kinds of laws they are now is like saying that marriage wouldn't exist without marriage licenses.

[erowe1]

It's pretty simple, bank loans corporate person money, corporate person uses some of that money to pay the men pulling the strings. Corporate person goes bankrupt, even though some of that money went to the men behind pulling the strings, they can't be touched.

Why would the bank want to do that?

[Bohner]

If you can prove if it was the string puller's act or inaction caused the corporation's acts/harm, can't you go straight for the puller? In the criminal context, that's always the way.

Not necessarily. Obviously a string puller can't shoot another person and say the corporation did it. Perhaps in a criminal context, but you have to prove that the string puller clearly broke the law, and even then, he may still not be liable.

If you want to go after the string puller personally in civil court for damages, it's not happening.

[Bohner]

Why would the bank want to do that?

Do what? Lend out money?

That's what banks do.