| I have a hard time believing that an individual or partnership without limited liability has a similar ability as a corporation to accumulate and hold assets (unless they have a corrupt government protecting them). The risks of operating without limited liability are rather high. The ability to issue shares to millions of people is also rather powerful. The corporation is a massive government subsidy to anyone who wants to manage a legal entity with limited liability, and the ability to raise funds in a big way. Managing a partnership or any non-government created entity with thousands if not millions of partners is quite difficult. Contracts cannot provide the same limited liability that the government can. Simple example: if the driver of a car for a partnership runs over and kills someone in the course of his job -- contracts won't stop the family of the killed person from going after the assets of the natural persons of the partnership. With corporations it would be more impossible to go after shareholder assets. Limited liability is huge; without it, lawyers would find many ways to get to assets that they can't now. Also, contracts are not much to hide behind as compared to the government. Contracts can be busted, interpreted in unusual ways, etc. The limited liability offered by the government to shareholders is rather fool-proof. |