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White Island volcano eruption: Whakaari Management found guilty of ‘astonishing’ safety failures
(www.theguardian.com)
this post was submitted on 31 Oct 2023
21 points (95.7% liked)
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This is why limited liability companies are bullshit.
This LLC is a defendant, and has been convicted... but the three directors: the people responsible for the company are acquitted.
Whilst I agree this situation is terrible; LLC's are an advantage to the country as a whole.
If the LLC is removed what you get is unlimited liability; the knock-on effect from this is that only those that can afford significant insurance costs will be able to operate a business. This will entrench the already rich, worsening inequality and making it very difficult to close that gap.
If a company can't afford to compensate its directors such that they can afford insurance to cover their unlimited liability then that business's activity is too risky.
Limited liability just moves that risk to employees, suppliers, and customers of a business: they're the ones that do not get paid or delivery when a company fails.
"Poor" people can't afford to take any risks! Starting a risky business is only slightly less of a bad idea than developing a gambling habit.
What about starting a non-risky business, like a cafe? The insurance requirements will still be very high.
What I think you are looking for is, that LLC protections don't cover negligence....which is starting to come into law. Look at the health and safety at work act.
Why are the insurance requirements high? Because it's risky. Cafés survive only at the whim of very ficklest of customers.
But with unlimited liability, if your cafe fails, you lose the house and future earnings can be on the line also.
LLC is for financial protection, not for criminal and now it also doesn't cover health and safety negligence.
That's the point.
LLC limits that liability of the directors and only the directors. The liabilities are still paid for by someone. LLC just means that someone is someone else: probably supplies and employees who don't get paid.
If you can't afford to self insure your cafe, don't start a cafe.
I can't afford to start an investment bank, so I don't try.
I agree. It's not a human. But human decisions led to this outcome.