|
|
|
Limited liability gives extensive rights to the Private Sector
I also want to ... remind people of the history of limited liability and of corporations.
The concept of limited liability was seen originally by those who were in charge of England and the United States at the time it was arising as a very dangerous principle because essentially it offered to individuals the possibility of combining and limiting their liability for actions that they might take corporately as an organization, that if they, in effect, defrauded or abused their trust, their creditors could no longer seize their personal assets; they could only seize the assets of the limited corporation.
There was extreme, extreme reluctance on the part of American states to give limited liability to companies, and the first charters were very carefully drawn with very careful duties being imposed on the companies so chartered, so that this limitation of liability which was seen as a great privilege, which was seen as an extension of a tremendous amount of immunity from risk--so that this privilege would not be abused.
Now today, unfortunately, we have been moved to the place where we take limited liability as a right as opposed to as a privilege, and this comes into this question of what we transfer then to a company with limited liability. Essentially, a limited liability company has the ability to reduce its assets to zero, to impoverish its creditors, to waste its assets, to provide poor service and ultimately to go bankrupt, and its assets then go to its creditors.
Source: Tim Sale Orders of the day, Legislative Assembly of Manitoba, 20 Nov 1996.
|
|
|
Offsite pages
|