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Old 07-26-2019, 08:31 PM
Wrenching Spanners is offline
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Join Date: Jun 2011
Location: London
Posts: 574
Quote:
Originally Posted by Crane View Post
WS,

I have stayed within the context of the OP - "Personal responsibility or avoiding personal responsibility" - the purpose of the corporate form is to avoid personal responsibility.
Yes, that's true, but please explain why in terms of funding ship voyages, or any other economic enterprise that involves distribution of risk, how the positives of limiting risk and encouraging investment is a negative. Also, note that if you're requiring personal liability for an investment, you're acting as a huge brake on investment. I might be happy to invest 1000 in a ship's voyage, knowing that if the voyage fails, I've lost my 1000. However, if I have to ensure I'm covered for voyage failure, crew injuries, etc., I'm going to be much less likely to take that risk. Under the corporate model, the responsibility for risky decisions hits the people actually making the decisions - in other words the people who have actual personal liability. Granted, they may not actually be able to pay for their bad decisions. But if I'm facing unlimited liabilities for my 1000 investment, then me and every other investor are having to assess the risk of unlimited liability, and there's a very reduced amount of investment going on. Again, 400+ years of history has shown the value of being able to make investments where the investors liability is limited to the value of the investment.