Business & Economy

Risk, Reward and Responsibility: Limited Liability and Company Reform

Michael Schluter

This article argues that limited liability companies are contrary to biblical teaching because they allow for certain debts to remain unpaid. It also calls attention to ownership structures whereby shareholders receive some of the benefits of ownership but do not carry the corresponding portion of risks and responsibilities associated with that ownership. In the article Schluter starts off by providing an overview of the limited liability company and its apparent advantages. He then identifies several biblical principles to evaluate company structures and behaviour before proceeding to highlight some of the relational consequences of limited liability companies. He concludes by suggesting changes that would bring greater alignment between risk and reward within corporate structures. In summary, this article offers a measured critique of corporate structures and suggests potential steps forward to correct the problems inherent within these structures.

Source: Cambridge Papers

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