No Limited Liability Corporations?

Nothing can be so unjust as a few persons abounding in wealth to offer a portion of their excess for the formation of a company, to play with that excess, to lend the importance of their wholename and credit to the company, and then, should funds prove insufficient to ranswer all creditors, to retire into the security of their unhazarded fortune, and leave the bait to be devoured by the poor deceived fish-Editorial in the Times of London, 1824​
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One of the more interesting aspects about the limited libility corporation is that when it was foirst formed, there was significant opposition to their use and existence, on the part of people who theought the entire idea of letting rich investors limit their liability was fundamentally unjust and provided no real benefits.

So WI there were severe restrictions on their creation and use?

Hrmm. I'm not sure how you get this in anything short of Luddite Britain. Maybe a Napoleonic Europe?
 
On DemocraticUnderground, there's some thread claiming LLCs need to be destroyed in order to truly have democracy.

The hysterical opening post aside, someone listed a whole bunch of Supreme Court decisions that established LLCs in the US, in particular "corporate personhood."

Have any of those court decisions go the other way for whatever reason and you'd at least limit them/exclude them from the US.
 
I don't see how you could limit them. They were around at the time of the Constitution, so it's hard to see the decisions coming out differently.
 
I don't see how you could limit them. They were around at the time of the Constitution, so it's hard to see the decisions coming out differently.

Well, specifically limited liability corporations weren't a major part of life until the 1870's when corporate enabling laws started being passed in different states. Incorporation used to be something only a legislature could grant, usually done for utilities companies, infrastructure, schools, and banks. Limited liability is something separate from the corporate structure, though, there does exist such a thing as a limited partnership or proprietorship.

If you could find a way to stave off the restraining laws that were passed in various states in the first decade of the 1800's that precluding banking business being done by anyone without a charter from a state legislature, that will keep incorporation limited to just specifically public activities (like schools and infrastructure). It'll be hard to keep it to JUST these activities (Aaron Burr's first foray into banking was through a charter granted to supply water to New York City), because incorporation has obvious advantages that unscrupulous business persons will chase after as long as they believe it's possible, especially after Dartmouth v Woodword gives them legal personhood and legal rights.

Anyway, no LLCs adds stability to the banking industry for one. While banks could still set themselves up as limited companies, they'd be private in nature and more likely to have their creditors keeping a very, very close eye on their solvency, versus the modern limited corporation which has the implicit backing of the government.
 
Remember that the term Corporation dates back to medieval law. In those days, a "Corporation" might be a city government (there are still some old cities whose governments are called "corporations"), a monastery, or a university. The basic idea was that one individual member would not be liable for the debts of the whole entity.

In the seventeenth century, starting with the Dutch East India Company, Corporations were created purely to make profits, with "Merchant Adventurers" as their investors. This meant that a lot of "risky" things could be tried, such as new exploration, new settlement and conquest, and new trade, and the investors did not have to worry about losing any more than their initial investment. Without corporations, there would have been much less of this. The development of the corporation is one of the things that eventually led to the Western Civilization coming to dominate the globe--without the corporation they might not have.

As others have said, in the late nineteenth century corporations became even more powerful, with the Supreme Court decisions that bestowed "personhood" on American corporations.

KEVP
 
Well, the rich have assorted other means of limiting risk, from assorted insurance arrangements to careful management of investments. The big thing with the LLC is that it allows the raising of investment capital from outside the traditional "rich capitalist/merchant" group. This of course, massively expands the overall pool of investment capital which in general is more good than bad, particularly in countries with a large middle class.
 
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