Reply #15: What happens in practice....

[jberryhill]

...is that if you are running a corporation as your own personal instrument, it is undercapitalized, you don't have outside directors, and you are doing rotten stuff, the corporation is not going to provide a lot of protection.

The flip side is that if you own X shares of Exxon, and they run an oil tanker into Waikiki beach, nobody is coming to take your house.


I'm not restricted from PROFITING individually- The accountability we have as "individuals" doesn't make the leap that the profit does.


Yes and no. That profit is going to be taxed twice (with a minor exception for very small corporations). There are also a number of situations in which directors are held personally liable for things that a corporation does, which is why there is a type of liability insurance specifically designed for corporate directors. It is not the blanket shield to all legal harms that it is made out to be. As far as extending credit to corporations, that's why there are credit ratings.