"Richard J Kinch" wrote in message
. ..
Ed Huntress writes:

And which of those couldn't be handled by existing contract- and other
law, without limited liability?

Perhaps none. Doesn't matter. The point is that there is more basis to
the legal theory of corporations than your assertion of "limited-liability
... nothing else".

They're all elaborations, Richard. The revolution occurred when stock
associations were first granted charters and an associated limitation of
liability to the amount invested. From that, the entire blossoming of
corporations occurred.

Of course it's more complicated now, and the whole idea has been elaborated
and fine-tuned. But the precipitating idea, and still the fundamental idea
that makes it all possible, is the limitation of liability.


If corporate law somehow had never existed, and tomorrow the division of
ownership (etc) were implemented as you hypothesize in contract law, then
this would simply be the law of corporations by another name, with or
without limited liability.

If you look at the history, you'd see that the development and flowering of
stock companies occurred after liability was limited.

And, if you didn't have limitation of liability, every stock holder in Enron
would be liable to any suits brought by the Federal Government, the state of
California, or the company's employees, individual customers, and so on. It
would be a nightmare. Knowing they were liable from the beginning, very few
people would ever invest in ANY corporation.

Ed Huntress