Limited liability in a free market society...

[angelatc]

That is fine. The problems begin when the government creates non-liability as the default without consent. Here's one of the reasons why the giant corporations of today could not exist without the government non-liability mandate:

When you buy stock in a corporation, you rely on being insulated from anything the corporation does. You rely on the government-created corporate shield limiting your losses to just the amount you invested.

Absolutely. I also rely on the corporation to carry insurance to cover such losses on my behalf.

[Acala]

That's wrong. A group of individuals owned it. People who screech about corporations are, in my imho, saying that people shouldn't be legally allowed to join together for the purpose of engaging in joint business ventures.

The business itself - land, factories, goods, gross income, contracts - is NOT owned by the individuals. It is owned by the corporation, which is a separate legal entitiy. No living human being has any direct legal interest in the business itself. Individuals DO have an ownership interest in the corporate entity.

[Acala]

Ownership is exchanged for cash. That's the contract. Corporate executives go to jail for fraud on a fairly routine basis, and the profits of the owners are reduced by fines, fees and penalties on a routine basis. Obligations met.
So people can't own property jointly?

People can own property jointly. No problem with that. But when they do, they have all the responsibilities of ownership.

[angelatc]

I believe there are some pretty bad ways of how corporations are currently handled by government.

However, I believe bankruptcy laws are were the real problem lies. Those laws do nothing but protecting debtors and screwing lenders. And that's true for corporate bankruptcy as well as for private bankruptcy (at least where I live, and I believe it's pretty much the same everywhere in the industrialized world).

In bankruptcy, lenders (bondholders, banks and vendors) get first dibs, after payroll obligations. Stockholders (owners) are last on the list of people who get anything.

[angelatc]

People can own property jointly. No problem with that. But when they do, they have all the responsibilities of ownership.

So corporations pay taxes, they carry insurance, they build on their property, they might rent their property....no problem.

[Acala]

Absolutely. I also rely on the corporation to carry insurance to cover such losses on my behalf.

Really? I am willing to bet that you don't even know which corporations you have money invested in, let alone whether or not they have insurance. If you have a pension, it is likley invested in a large number of corporations. Do you have any insurance? Insurance companies are among the largest institutional investors in the stock market so you are invested there. Are you invested in mutual funds? I'll bet you can't list their investments.

The limit on liability allows for widesprfead stock ownership with no oversight by the owners.

[Acala]

If the organization pays the settlement out of the coffers, the shareholders are paying.

But I think it's ridiculous to assert that if a newly hired truck driver has a traffic accident driving the company truck that I could be personally sued because my mutual fund invested in shares of that company. When I invested, I in essence agreed that I might lose a piece of the profit if someone running the company does something horrible, or even accidental. I also in essence agreed to pay for insurance against that scenario through the company.

But if I only bought $10,000 worth of stock, no way should my entire portfolio be in jeopardy because I happen to have one.

Of course you LIKE being on the side where you are protected from liability. Wait until you have been injured by a corporation with no assets. Professionally, I have to deal with shell corporations all the time. They have nothing in the way of assets or insurance. And it is legal.

[Acala]

So corporations pay taxes, they carry insurance, they build on their property, they might rent their property....no problem.

For reasons previously stated, government-created corporations are a BIG problem and would not exist in their current form in a free market.

[angelatc]

The business itself - land, factories, goods, gross income, contracts - is NOT owned by the individuals. It is owned by the corporation, which is a separate legal entitiy. No living human being has any direct legal interest in the business itself. Individuals DO have an ownership interest in the corporate entity.

There is no such thing as a tangible business in that context. Corporations exist to engage in business. Corporations own assets, and shareholders own those assets because they are the owners in the corporation. Corporations are only a set of pre-fab legalities designed to expedite a myriad of routine issues that arise with ownership by multiple individuals.

[angelatc]

For reasons previously stated, government-created corporations are a BIG problem and would not exist in their current form in a free market.

NO they are not the problem, and they absolutely would exist in a free market. In fact, they would be more common, because the SEC would not regulate who was eligible to invest and trade.