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Comment by dmk23 | Hacker News Reader

The liability is not truly limited anyways.

Proof of fraud in the court of law is sufficient to pierce the corporate veil and hold the principals accountable. It is another thing that most of the so-called "corporate crimes" fail to clear even the basic bar of proof under due legal process. Just because someone disagrees with a business decision of a corporate executive does not make that decision a crime.

Unlimited liability would have the effect of stifling entrepreneurship and/or export of capital and jobs into more favorable jurisdictions, including offshore shells.

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Torts of all sorts can potentially "pierce the veil"; it's probably safer to think of the liability protection of a corporation as something pertaining exclusively to contracts (though that obviously oversimplifies it).

Also remember that the veil does not protect individuals from being found liable their own part in corporate actions. This is the basic promise of a limited partnership: I give you money to start your business. I am liable only to the point of my investment, but you are responsible for all of your decisions.

I think we should just treat corporate C-level officers as unlimited partners with regard to decisions made under their watch. That would mean effectively that business debts that the corporation could not pay would fall on the officers to guarantee, and that things like product liability would be treated a little differently.

> It is another thing that most of the so-called "corporate crimes" fail to clear even the basic bar of proof under due legal process.

I'd be interested in elaboration.

I believe the simplest explanation is that while all you need is a preponderance of evidence to sue in civil court, you need beyond a reasonable doubt in criminal court which is what is required to pierce the veil of the corporation.

Put another way, if I prove in a civil suit that you wronged me, that is not automatically enough proof to go after you criminally (which is likely what most people believe).

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