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Old 07-27-2019, 07:15 PM
Triskadecamus is offline
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Join Date: Oct 1999
Location: I'm coming back, now.
Posts: 7,601
A corporation can own a corporation. It limits its liability to the amount of money the exercise costs. A corporation can loan its totally owned corporation enough money to build and operate very dangerous equipment, and make the terms of the charter specifically prevent the subsidiary from retaining any capital during the probable time period based on the useful lifetime of the very dangerous equipment. When that equipment fails to function, even catastrophically, the owning corporation's loss is never more than the cost of the loan. Profits from goods sold before the catastrophe have already been paid out as dividends. The very name Limited Liability Corporation comes from the function described.

Tris
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