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Huh? I'm lost here.
The legal protection from liability of forming a corporation is 100% a creation of government. I'm really not sure how you even conceptualize it absent a government that, you know, registers corporations and enforces concepts of liability to begin with.
Its the right of the goverment to do what it wants part that I object to here. Your "why not" seemed to support that. If not there is some misunderstanding.
I am not pushing a libertarian argument although I do favor a constrained goverment even when the goverment does enforce rights. Unironically society should force the goverment to restrain itself and have the controls and balances that leads to such situation.
If a limit to goverment power comes from the goverment that still distinguishes such goverment from one that does not accept such limits.
Yes there is a severe misunderstanding.
My position is that limited liability and fictitious entities are entirely a creature of governmental systems. In a government-free stateless system of contractual ethics, things would go quite differently, there would be no concept of limited liability.
Consider the following scenario, which I and my family and friends of mine have all faced many times:
X is a rich real estate investor. X forms ABC property corp, with X as primary shareholder and head honcho. X hires a number of contractors to build buildings for ABC Property corp, excavation to electrical. ABC Property corp fails before completion of the building due to economic circumstances, declares bankruptcy. The contractors are unable to collect money from ABC property corp beyond a possible subordinate lien on the half-finished building. X still has his non-ABC property, his house and his nice cars and his investment portfolio of other investments in stocks etc.
Under a stateless system, I see no ethical reason why the contractors wouldn't get together (along with their friends, patrons, hired thugs etc.) and go to X and say: You owe us money, you signed the contract, sell your house sell your Mercedes sell your stocks and pay us. Certainly historically, it wouldn't be uncommon for the contractors or their patrons to collect his violently, even selling X and his family! The only thing that would keep X free from liability would be his own capacity for violence, his own patrons and hired collections of thugs.
Under a state system, we shrug and say well actually your debt was owed by ABC not by X, X can't be held liable, no matter how rich he is or how much you need the money, he said the magic words and maintained the sacred rituals so his liability is limited. Occasionally insult is added to injury: X forms DEF corp and buys the ABC corp assets at a cut-rate price. That can only occur as a result of legal fictions, as a result of the state and the state's monopoly on violence. Primarily on utilitarian rather than ethical grounds: it is good for investors to be able to protect their assets from liability as it encourages investment. But without a state the idea of "X hired me and signed the papers, but when he did that he was the agent of ABC not X, he didn't sign the papers as X."
One comment brought up "You Didn't Build That!"; to me the argument that government's can't change the rules of LLCs rings of "Keep your Government Hands off my Medicare!"
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