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Comment by bdowling | Hacker News Reader

First, a corporation can’t do anything that an individual can’t do.

Second, incorporation does not protect the business, it protects investors. Without it, investors would be general partners and would be personally liable for anything the business does, including all debts and torts, even if they had no active role in running the business.

Third, where owners of a corporation or LLC do participate in running a business, they often can be held personally liable for the debts and torts of the business. This is called “piercing the corporate veil” and happens all the time in lawsuits against small businesses.

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> First, a corporation can’t do anything that an individual can’t do.

The problem is not that a corporation can do something that an individual can't. It's that you can't punish a corporation the same way you can an individual. Corporations cannot sit in a jail cell.

> Second, incorporation does not protect the business

Your Third point kinda disproves this. You have to "pierce the corporate veil" in order to hold individuals of the LLC liable and this is generally w.r.t. an LLC commingling its funds with the owners funds. Not to do with an Owner doing an undesirable/illegal act (say fraud).

> Third, ... happens all the time in lawsuits against small businesses.

I'm not really sure any of these points counter-act anything I wrote. I explicitly called out Wells Fargo and you responded that small business routinely get attacked. Wells Fargo is not a small business.

Any person who commits a crime on behalf of their employer can and should be held criminally liable. That the employee was instructed to do so by his manager will not prevent his conviction, it will only be evidence that the manager should also be held criminally liable.

Veil-piercing is relevant when the business is insolvent or can’t pay the judgment. So the corporate entity isn’t protecting the business in that case.

Re Wells Fargo, would you hold ordinary shareholders who do not participate in the management of the business liable for debts of or crimes committed by Wells Fargo?

> investors would be general partners and would be personally liable for anything the business does, including all debts and torts, even if they had no active role in running the business.

I think it would be a better world if investors were held responsible for the wrongdoings of the businesses they finance.

If that were the case, you wouldn’t have nearly as many investors.

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