50 Things That Made the Modern Economy Limited Liability Company
Jul 22, 2017
Discover the intriguing origins of Limited Liability Corporations, dating back to 1600s England, and how they shield investors from financial disaster. Explore the significant economic transformation these entities sparked, despite criticism from thinkers like Adam Smith. Delve into the complex balance between corporate governance and social responsibility, illustrated by historical precedents like the East India Company. Finally, reflect on how large corporations influence the economy and public trust in capitalism, highlighting the essential role of limited liability.
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Corporations as Legal Entities
- Corporations are legally distinct from their owners, operators, and employees.
- This legal distinction is a concept conceived by lawmakers.
East India Company and Limited Liability
- The East India Company, chartered in 1600, became a model for modern corporations.
- Its charter uniquely granted merchants limited liability.
Importance of Limited Liability
- Limited liability protects investors from personal debt for company actions.
- Without it, investment in large ventures would be extremely risky.