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The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

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Dear Wol: You *must* grin. Suppose IBM knows they (and everyone) is paying too much? | 146 comments | Create New Account

Comments belong to whoever posts them. Please notify us of inappropriate comments.

Dear Wol: You *must* grin. Suppose IBM knows they (and everyone) is paying too much?

Authored by: Anonymous on Tuesday, July 31 2012 @ 11:29 AM EDT

The liability is not lost in totality. It is mearly limited for each individual
to the amount of their investment (equity).

Also, with a sole proprietorship or partnership, you can not sue the business at
all. You have to sue the owner or owners personally.

Part of the purpose of the legal fiction of corportate personhood is to allow
the corporation to sue or be sued as an individual.

With out this and the limited liability of the individual shareholders, the
situation for corporate liability would be much worse. You would have to sue
each of the executive officers and each shareholder individually.

This would be impratical and costly and with today's large corporations you can
have the situation where the owners have fewer assets in total than the
corportation. This could create a situation where even if you could get a
judgement against one or all of the officer's and shareholders it would be
effectively unenforcable.

[ Reply to This | Parent | # ]

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