Corporations' Impact on the Economy
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A corporation is a legal construct with an identity separate and apart from its owner(s). The primary legal advantage to converting one's business from an unincorporated enterprise to the corporate form is the ability to avoid personal liability for the business's financial obligations. Since the corporation is distinguishable from its owner, the owner's personal assets cannot be seized to satisfy business indebtedness. This effectively means that an owner can "crash and burn" a corporation financially, bankrupt the business, and walk away from the "flaming wreckage" of the corporation without personal obligation for business debts.
Is it ethical for an owner to use the corporate entity to avoid personal obligation for business debts?
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Solution Summary
This solution of 105 words argues that it is ethical for an owner to use the corporate entity to avoid personal obligation for business debts.
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Yes, because corporations are predicated upon the pursuit of generating jobs, finances, and capital, which all benefit the greater economy. Therefore, allowing ...
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