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Old 07-27-2019, 03:19 PM
k9bfriender is offline
Join Date: Jul 2013
Posts: 11,564
Originally Posted by Wrenching Spanners View Post
With regards to ownership, corporations are not about personal responsibility. The owners are at risk of losing their investment, but unless they are involved in the decision making of the corporation, they aren't liable for the bad actions of the corporation. I think this is a necessary feature of capitalism. It's definitely a structure that protects the wealthy. But society as a whole benefits when investment is enabled. However, limiting the risk of owners is different from protecting decision makers within a corporation, which includes the board of directors. Those people should be personally responsible for their actions, and shouldn't be allowed to blame the corporation or society for their bad acts.

For a recent example, look at the Volkswagen emissions scandal. Volkswagen shareholders shouldn't be subject to lawsuit because Volkswagen engineers and leadership rigged their cars' exhaust systems. If shareholders were liable, you'd have fewer people investing in car companies. Maybe that's not so bad for diesel, electric cars aren't risk free either. I want there to be investment in the next generation of electrical cars. If a collection of executives knowingly release a battery with a hazardous flaw, then absolutely hold each of them responsible, both civilly and criminally. If the consequences cause the company to go bankrupt, then the investors lose the money they put into the corporation, which isn't a small thing.
I'll agree that shareholders shouldn't be liable for the actions of a company that they invested in, but directors and CEO's absolutely should be. I see corporations as sociopaths with superhuman powers*. You can tell a superhuman sociopath to make widgets, to provide customer services, or to rob a bank. It has no morals or conscience, and so will do anything within its power with equally lacking sense of pride or guilt. Their CEO's and directors are the guardians of this entity, and should be wholly responsible for the harms caused. I have rarely seen the people in charge of a corporation to be held to nearly the same account as if a average citizen had caused the same amount of damage.

People do sometimes claim that it is not fair to the investors that their investment itself is at risk if the company is held liable for the damage it causes.

I'd also like to point out that an LLC does not entirely absolve the owner from liability of debts. Landlords and banks are not stupid, and will require an actual person to sign a personal guarantee on the debt, meaning that if the LLC goes belly up, the owner may well be stuck with debts incurred by it.

*superhuman, not supernatural. They can do things that individual humans cannot.