Limited Liability – The Most Important Aspect of a Business Entity

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We regularly form and restructure legal entities for our clients (LLC, S-Corp’s, etc.).  We advise our clients that a properly formed business provides a shield of protection from the business owner’s personal assets.  While researching this important concept, we found an Economist Magazine article from 1999 that still provides pertinent information today.  We hope you find it interesting.  The article contains the below limited liability history and then explains the impact of limited liability on national and international financial markets:

Shares were first issued in the 16th century, by Europe’s new joint-stock companies, led by the Muscovy Company, set up in London in 1553 to trade with Russia. (Bonds, from the French government, made their debut in 1555.) Equity’spopularity waxed and waned over the next 300 years or so, soaring with the South Sea and Mississippi bubbles, then slumping, after both burst in 1720. But share-owning was mainly a gamble for the wealthy few, though by the early 19th century in London, Amsterdam and New York trading had moved from the coffee houses into specialised exchanges. Yet the key to the future was already there. In 1811, from America, came the first limited-liability law.

Full Article:  http://www.economist.com/node/347323

 

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