- 07 Mar 2009 20:16
#1826312
First, in order to understand why I am calling for such a drastic step, a little background is in order. (All information gathered from The Wiki )
The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity
In the late seventeenth century, Stewart Kyd, the author of the first treatise on corporate law in English, defined a corporation as,
"a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested, by policy of the law, with the capacity of acting, in several respects, as an individual, particularly of taking and granting property, of contracting obligations, and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation, or at any subsequent period of its existence."
This structure has come to be regarded in the modern day, at least in the West, as some kind of sarcosanct business model. While the definition above appears to be fairly innocent and straight forward enough, it's the comment about "enjoying privleges" that I will ultimately make a case against.
Fast Forward to the 1800s:
In the United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature.
In 1819, the U.S. Supreme Court granted corporations a plethora of rights they had not previously recognized or enjoyed. Corporate charters were deemed "inviolable," and not subject to arbitrary amendment or abolition by state governments. The Corporation as a whole was labeled an "artificial person," possessing both individuality and immortality.
In 1844 British Parliament passed the Joint Stock Companies Act, which allowed companies to incorporate without a royal charter or an additional act of Parliament.Ten years later, England enshrined into law the preeminent hallmark of modern corporate law - the concept of limited liability. Acting in response to increasing pressure from newly emerging capital interests, Parliament passed the Limited Liability Act of 1855, which established the principle that any corporation could enjoy limited legal liability on both contract and tort claims simply by registering as a "limited" company with the appropriate government agency
So now, the collective national governments of the US and the UK have created false legal persons that are able to amass immense wealth, are beholden to themselves only, and are only as liable for damages or misdeeds as the corporation they serve or are employed by have funds. Unlike anywhere else in society those who run a corporation are not liable for the deeds they commit in the name of the corporation or while acting in corporate intertests. If I run over my neighbor I am liable. He can sue me for everything I have, and may even have a lein taken against me for future earnings. If a guy in a corporate vehicle does it and the corporation is broke, my neighbor has no recourse. More importantly if say...R.H. Robbins ignores safety warnings concerning products they want to develop, and they produce them in an unsafe way that ultimately leads to the death of many unborn children (talk about forced abortions!) the people within R.H. Robbins don't get a free pass once corporate assets are extinguished. They pay, and they keep paying until all debts are resolved or until they die. This includes shareholders.
Limited liability
Unlike in a partnership or sole proprietorship, shareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations.As a result, their potential losses cannot exceed the amount which they contributed to the corporation as dues or paid for shares.
So those who own shares in a corporation only stand to lose their original investment in the shares they have purchased. My thought is that this insulates the shareholders from legal liability far too much, as they are free to disavow any knowledge of misdeeds or other debt related obligations. While this is probably mostly true, because corporations are run by their boards, striking this special legal protection from the books is in the best interests of just about every non-corporate entity that exists. Limited Liability is abused beyond all reason. Imagine if sharholders in Enron or UNOCAL were held liable for corporate actions? Imagine if the shareholders of Coca-Cola were held liable for the poisoning of water in India and South America? Imagine if share holders of United Fruit could be imprisoned because of corporate misdeeds in the 1900s in the banana producing nations in South America?
It would strike a mighty blow for the consumer, and would have the indirect benefit of breaking up a whole world of wealth and power that has sat in the hands of a few who have abused it for their own benefit for far too long. Unlike Libertarians who fear government power in the hands of too few, I also recognize and rightly fear private power in the hands of too few. When one analyzes the conditions that brought corporations into being one can easily surmize that this occured, not with the consumer in mind, or the overall welfare of the various nations, but with the overwhelming profit of the corporation in mind. Far from the benign hand of friendly competition the corporate model is about little other than enriching shareholders and those who sit at the helm of these monstrosities.
So then, my call is to revoke limited liability for corporations, in addition to making the shareholder of said corporation liable in all ways for the damage or debts done in the name of said corporation. Corporations would no longer be viewed as legal people, but simply as another institution of business like any individual, company, or trust, etc. A roll back, if you will, to the laws that applied to corporations in 1800. Corporations may continue to be goverened by their boards if they like, but they must have a charter, and this charter must be followed by all legal means. It will be the individual shareholder's responsibility to be aware of what is being done in their name and either sell or attempt to make changes as they deem necessary. They should have a legal liability to report any illegal activities to the appropriate authorities, and should be held accountable should they fail to do so.
While I understand very well that this proposal will essentially break the back of big capital and will highly limit a corporation's ability to carry out business I feel this radical a step is highly justified once a thorough and honest look is given to what corporate America has done to the people of the country, and in the world. Wresting control of these highly powerful and wealthy organizations, and dispersing it throughout the population will help prevent war, abuse of the individual, (Though I'm not environmentalist...) it will certainly aid the environment, and could even begin to break up the inherant fascism that took root in American government during its inception.
The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity
In the late seventeenth century, Stewart Kyd, the author of the first treatise on corporate law in English, defined a corporation as,
"a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested, by policy of the law, with the capacity of acting, in several respects, as an individual, particularly of taking and granting property, of contracting obligations, and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation, or at any subsequent period of its existence."
This structure has come to be regarded in the modern day, at least in the West, as some kind of sarcosanct business model. While the definition above appears to be fairly innocent and straight forward enough, it's the comment about "enjoying privleges" that I will ultimately make a case against.
Fast Forward to the 1800s:
In the United States, government chartering began to fall out of vogue in the mid-1800s. Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states. Forming a corporation usually required an act of legislature.
In 1819, the U.S. Supreme Court granted corporations a plethora of rights they had not previously recognized or enjoyed. Corporate charters were deemed "inviolable," and not subject to arbitrary amendment or abolition by state governments. The Corporation as a whole was labeled an "artificial person," possessing both individuality and immortality.
In 1844 British Parliament passed the Joint Stock Companies Act, which allowed companies to incorporate without a royal charter or an additional act of Parliament.Ten years later, England enshrined into law the preeminent hallmark of modern corporate law - the concept of limited liability. Acting in response to increasing pressure from newly emerging capital interests, Parliament passed the Limited Liability Act of 1855, which established the principle that any corporation could enjoy limited legal liability on both contract and tort claims simply by registering as a "limited" company with the appropriate government agency
So now, the collective national governments of the US and the UK have created false legal persons that are able to amass immense wealth, are beholden to themselves only, and are only as liable for damages or misdeeds as the corporation they serve or are employed by have funds. Unlike anywhere else in society those who run a corporation are not liable for the deeds they commit in the name of the corporation or while acting in corporate intertests. If I run over my neighbor I am liable. He can sue me for everything I have, and may even have a lein taken against me for future earnings. If a guy in a corporate vehicle does it and the corporation is broke, my neighbor has no recourse. More importantly if say...R.H. Robbins ignores safety warnings concerning products they want to develop, and they produce them in an unsafe way that ultimately leads to the death of many unborn children (talk about forced abortions!) the people within R.H. Robbins don't get a free pass once corporate assets are extinguished. They pay, and they keep paying until all debts are resolved or until they die. This includes shareholders.
Limited liability
Unlike in a partnership or sole proprietorship, shareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations.As a result, their potential losses cannot exceed the amount which they contributed to the corporation as dues or paid for shares.
So those who own shares in a corporation only stand to lose their original investment in the shares they have purchased. My thought is that this insulates the shareholders from legal liability far too much, as they are free to disavow any knowledge of misdeeds or other debt related obligations. While this is probably mostly true, because corporations are run by their boards, striking this special legal protection from the books is in the best interests of just about every non-corporate entity that exists. Limited Liability is abused beyond all reason. Imagine if sharholders in Enron or UNOCAL were held liable for corporate actions? Imagine if the shareholders of Coca-Cola were held liable for the poisoning of water in India and South America? Imagine if share holders of United Fruit could be imprisoned because of corporate misdeeds in the 1900s in the banana producing nations in South America?
It would strike a mighty blow for the consumer, and would have the indirect benefit of breaking up a whole world of wealth and power that has sat in the hands of a few who have abused it for their own benefit for far too long. Unlike Libertarians who fear government power in the hands of too few, I also recognize and rightly fear private power in the hands of too few. When one analyzes the conditions that brought corporations into being one can easily surmize that this occured, not with the consumer in mind, or the overall welfare of the various nations, but with the overwhelming profit of the corporation in mind. Far from the benign hand of friendly competition the corporate model is about little other than enriching shareholders and those who sit at the helm of these monstrosities.
So then, my call is to revoke limited liability for corporations, in addition to making the shareholder of said corporation liable in all ways for the damage or debts done in the name of said corporation. Corporations would no longer be viewed as legal people, but simply as another institution of business like any individual, company, or trust, etc. A roll back, if you will, to the laws that applied to corporations in 1800. Corporations may continue to be goverened by their boards if they like, but they must have a charter, and this charter must be followed by all legal means. It will be the individual shareholder's responsibility to be aware of what is being done in their name and either sell or attempt to make changes as they deem necessary. They should have a legal liability to report any illegal activities to the appropriate authorities, and should be held accountable should they fail to do so.
While I understand very well that this proposal will essentially break the back of big capital and will highly limit a corporation's ability to carry out business I feel this radical a step is highly justified once a thorough and honest look is given to what corporate America has done to the people of the country, and in the world. Wresting control of these highly powerful and wealthy organizations, and dispersing it throughout the population will help prevent war, abuse of the individual, (Though I'm not environmentalist...) it will certainly aid the environment, and could even begin to break up the inherant fascism that took root in American government during its inception.
- By Rancid
- By wat0n
- By Fasces
- By Tainari88