Limited liability only protects the capital of the shareholders, it doesn't protect the management of the company against criminal prosecution.
(In practice, however, managers are only rarely put in jail, both because it's notoriously difficult to prove white-collar crime (except in few cases, like insider trading, which are the pursued with extra vigor), and because CEOs are generally rich and well connected... but the problem there is corruption, not some inherent feature/bug of the idea of limited liability company.)
Perhaps I could have expressed it better. I meant to go for the financials. There are countless cases where the factory or mine has declined and instead of cleaning it up, as promised, they shutter the company. Then there's the countless cases where the company is doing something illegal. Take the proceeds back.
We take money earned from theft and drug dealing, we take the stolen car from the person who innocently bought it. There's an offence of receiving stolen property. We don't take the millions from the execs who made millions pushing pharmaceuticals illegally, or the nuclear plant CEO and shareholder that has now, by dint of closure, given the job of decommissioning to the state - i.e. all of us. Once in a blue moon there's a criminal prosecution, but they just about always manage to stay wealthy.
We need to rethink the limits of limited liability as it's become a convenient shield to hide all sorts of unethical, shitty and outright illegal behaviour behind.
I have always thought there should be a law that funds for things like mine clearup and pensions should be paid as the debt is incurred, and locked up so there's no way for the company to get at it.
Comparing a PtLd to a "personal business" the PtLd shields the owners from criminal liability for crimes committed by the PtLd, while the "personal biz" provides no such protection.
> Limited liability only protects the capital of the shareholders,
No, it also protects shareholders from crimes the PtLd commits in order to "serve them". This is a main problem with PtLds imho.
(In practice, however, managers are only rarely put in jail, both because it's notoriously difficult to prove white-collar crime (except in few cases, like insider trading, which are the pursued with extra vigor), and because CEOs are generally rich and well connected... but the problem there is corruption, not some inherent feature/bug of the idea of limited liability company.)