Wk2, Team Weekly Reflection Paper
Learning Team Reflection
Team E
LAW 531
March 18, 2011
Learning Team Reflection
Team E will address the benefits to commerce of having shareholders and other entities that shield their members, protected from personal liability and would commerce be better served if personal liability would attach to those individuals for the misdeeds of their entity.
In regard to the benefits of commercial entities shielding their shareholders from liability, Israt states that if the legal maneuver of shielding investors was not available, many investors would simply not take the risk of losing more than their invested capital. The shareholders who are not involved in the active management of the company would not want to take responsibility for those who are (CompaniesIncorporated, 2013).
For those shareholders who are not part of the company’s management team are forced to take responsibility for the actions of the company’s executives and employees, this would have a tremendous chilling effect on the stock market as all the investors buying and selling stock on a daily basis. They would suddenly become legally responsible for the actions of the companies in which they had invested, which would simply be an unworkable concept from the perspective of corporate and judicial practicality.
Team member Zachary believes that one type of benefit from shielding shareholders from personal liability would be more investing by shareholders. If shareholders were held liable for any company they invest in, it could cause them to become much more hesitant to invest in that company. During investing, if the shareholders only cared about the losses and gains then they would more than likely invest instead of taking on more responsibility like executives and employees.
Annette stated that it removes the risk of losing one 's personal assets when someone invests in a company. The only loss they would be liable for was their investment in the company (Cheeseman, 2010). It encourages
Team E
LAW 531
March 18, 2011
Learning Team Reflection
Team E will address the benefits to commerce of having shareholders and other entities that shield their members, protected from personal liability and would commerce be better served if personal liability would attach to those individuals for the misdeeds of their entity.
In regard to the benefits of commercial entities shielding their shareholders from liability, Israt states that if the legal maneuver of shielding investors was not available, many investors would simply not take the risk of losing more than their invested capital. The shareholders who are not involved in the active management of the company would not want to take responsibility for those who are (CompaniesIncorporated, 2013).
For those shareholders who are not part of the company’s management team are forced to take responsibility for the actions of the company’s executives and employees, this would have a tremendous chilling effect on the stock market as all the investors buying and selling stock on a daily basis. They would suddenly become legally responsible for the actions of the companies in which they had invested, which would simply be an unworkable concept from the perspective of corporate and judicial practicality.
Team member Zachary believes that one type of benefit from shielding shareholders from personal liability would be more investing by shareholders. If shareholders were held liable for any company they invest in, it could cause them to become much more hesitant to invest in that company. During investing, if the shareholders only cared about the losses and gains then they would more than likely invest instead of taking on more responsibility like executives and employees.
Annette stated that it removes the risk of losing one 's personal assets when someone invests in a company. The only loss they would be liable for was their investment in the company (Cheeseman, 2010). It encourages
References: Cheeseman, H.R. (2010). Business law: Legal environment, online commerce, business ethics, and international issues (7th ed.). Retrieved from the University of Phoenix eBook Collection. CompaniesIncorporated (2013). Liability protection. Retrieved from http://www.companiesinc.com/corporate-compliance/liability-protection.asp Kelton, E. (2012, April 2). Fraud shouldn 't be so rewarding. Retrieved from http://www.forbes.com/sites/erikakelton/2012/04/02/fraud-shouldnt-be-so-rewarding/