[JumpCrisscross]

> The company would get liquidated to the highest buyer

Who do you think gets the liquidation proceeds? If not the shareholders, one, that’s expropriation, which rule-of-law countries try to avoid. And two, that’s easier achieved with a fine.

For businesses requiring a license, suspending licenses could kill a business. Otherwise, “death penalty” is, at best, an expensive way to levy a fine and, at worst and most likely, inchoate.

[kyboren]

OK, shareholders might get some proceeds after secured and unsecured creditors, but as I am sure you're aware, share prices are generally a multiple of book value. With a corporate death penalty, the net present value of the expected future earnings of the company is 0.

A fine can be paid and the organization simply continues. But the point of the corporate death penalty is that the organization ceases to operate; executives and board members lose their plum positions in ignominy; shareholders lose enormous value; and the rotten people and incentive structures in the organization are scattered into the wind.