Stephen M. Honig

“Virtue has a veil, vice a mask.” — Victor Hugo

Corporations insulate shareholders from liability for entity debts and obligations. That is the historical reason for the corporate form. Insulation is a vital element of a robust commercial system, permitting concentration of capital where funding can be provided without exposing investors to risk beyond specified investment.

Industrialized nations long recognized the need for such protection. New York State’s 1811 general incorporation statute, and Great Britain’s Limited Liability Act of 1855, led the way in creating almost impregnable walls protecting ownership from enterprise risk.

To read the full text of this article by Duane Morris partner Stephen M. Honig, please visit the New England In-House website.