From: Bill Frantz <frantz@netcom.com>
Date: Thu, 12 Feb 1998 22:21:13 -0800 (PST)
To: Lizard <declan@pathfinder.com>
Subject: Re: "Corporations selling your ass down the road for a dollar"
In-Reply-To: <199802121211.HAA19946@arutam.inch.com>
Message-ID: <v03110723b10993b03d46@[207.94.250.77]>
MIME-Version: 1.0
Content-Type: text/plain


At 9:50 AM -0800 2/12/98, Lizard wrote:
>I've been saying that for a long time. I'm not 100% certain I wish to
>eliminate entirely the corporation, but the idea of an 'artificial person'
>as an entity to take the blame for crimes committed by real people is
>highly dubious to me. If Monty Burns says, "Let's dump the toxic waste in
>the school ground, who cares if some kids die!", then it should be he who
>faces criminal charges -- not his corporation which gets fined.

I fully agree, and I think US law agrees, that an illegal act by an
employee is not shielded by incorporation.  But as many people on this list
have noted, what the law says, and what is enforced are widely different.

Probably the most valuable feature of corporations is the way they limit
the financial liability of their stockholders and managers.  This limit
allows people to go into business without having to worry about business
creditors coming to take their houses and cars.  (And wives and first born
:-)

Since everyone knows what the deal is, there is no fraud.  Everyone
extending credit to a corporation knows that it is the corporation's credit
rating which is relevant, not the credit ratings of the members of the
board of directors.

Limited liability, coupled with the willingness of venture capitalists to
fund ventures lead by people whose previous ventures have failed, are the
engine which allows Silicon Valley's creative destruction approach to
making money succeed.


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