Comment by necovek
11 days ago
I think you missed the point: you can still take damages from the corporation, but if corporation cannot provide them (bankrupcy), owners are held liable for them instead. This is how non-LLC companies are treated.
The instrument of Limited Liability exists to encourage business formation and risk taking for small businesses to kick off.
The way large corporations and rich individuals would structure their projects into a number of corporation-owned LLCs is an obvious gap being addressed in law systems throughout the world.
That would make everyone who has a 401K, IRA, mutual fund, ETF or stocks liable for every action made by the companies invested in. That would be insane.
I am not making a judgement call, merely describing what the GP meant.
I do believe it is not as clear cut though — taking it to an extreme, imagine you directly invested in Epstein's sexual abuse business but only as minority owner. Should you be held liable or not? Now let's extend that to a pyramid scheme lending business. Or a company using child labour? When can we claim immunity and when not?