Passing Liability to States of Incorporation

Passing Liability to States of Incorporation

Under the corporate-law doctrine of limited liability, shareholders who invest in corporations are not liable for those corporations’ debts. Limited liability encourages economic growth by attracting investors, but it can also prevent monetary recovery for victims of corporate misconduct, creating a longstanding “dilemma” at the heart of American corporate law. In a recent article, Andrew Verstein, a law professor at the University of California…