Unlimited Liability Research Articles

Synthetic unlimited liability

A synthetic analog of unlimited liability exists to curb executive risk-taking. Total shares liability multiplies an executive's fraction of shares held by the costs of restoring the corporation's solvency. I illustrate using Spring 2023 bank failures. Total options liability comes from executives selling a put for each call received.

The Existence of Individual Companies As Legal Entities In Micro and Small Enterprises In Indonesia: A Review of The Problems of The Alter Ego Doctrine

The enactment of the Job Creation Law affects the provisions of Limited Liability Companies. The mechanism for establishing an Individual Company which is explained implicitly in the Company Law and the Job Creation Law raises issues related to the process of organ responsibility in an Individual Company which states that directors can concurrently hold positions as shareholders and vice versa. One of the problems of the presence of Individual Companies in MSEs in Indonesia is the birth of Alter Ego conditions. The solution to limit the unlimited liability of corporate organs is that the government needs to strengthen and reinforce the doctrine of Piercing the Corporate Veil for Individual Companies and provide legal certainty regarding the regulation of corporate organs in the Company Law and Government Regulation No. 8 of 2021. This article examines the existence of individual companies in the context of micro and small businesses in Indonesia. The focus of the analysis lies on the concept of the alter ego doctrine which often becomes a problem in business practice. This research utilizes a document analysis approach and literature study to explore the legal and practical implications of the alter ego doctrine on individual companies in Indonesia. The analysis shows that the alter ego doctrine has a significant impact on the personal liability of micro and small business owners. The implications of these findings are discussed in the context of business regulation and legal protection for micro and small business owners in Indonesia.

How Housing Stress Affect Health Care Costs: A Panel Data Study.

As housing prices in China continue to escalate and the limitations of the "personal unlimited liability system" for housing loans become more evident, the financial stress on families has significantly increased. This stress not only impacts the physical and mental health of family members but also results in rising health care costs. This paper presents empirical research examining how housing stress influences changes in household health care costs through a panel data analysis. The study is based on the China Family Panel Study (CFPS) database and employs a panel two-way fixed effect model alongside a mediating effect model to examine the impact of housing stress, family income, and health status on health care costs. The findings reveal a significant positive correlation between housing stress and health care costs; specifically, for every 1% point increase in housing stress, health care costs rise by 0.141. Robustness tests and propensity score matching (PSM) further validate these findings, even after addressing endogeneity issues. Mediation effect analysis indicates that for every 1% point increase in housing stress, household disposable income decreases by 1.749, and health status declines by 0.468, thereby increasing household health care costs. Heterogeneity analysis demonstrates that housing stress has a more pronounced impact on health care costs among western, eastern, urban, and rental households. The government should implement various measures, such as promoting a "personal limited liability system" mortgage policy, reducing housing prices, and ensuring equal rights to rent and purchase, to alleviate housing stress, enhance family income, and improve residents' health status. These actions would contribute to the promotion of both the housing market and medical care, supporting the sustainable development of the health care sector and ultimately improving long-term social welfare.

Derivative Transactions on Sharia Hedging (Al-Tahawwuth Al-Islami Era 5.0 Perspective of Sharia Economic Law

Derivatives generally involve unlimited liability. The decline in traditional activities implies the future of the banking industry and creates new challenges for regulators. In other cases, Sharia hedging is a breakthrough for Indonesia to be based on the Qur’an and sunnah, which are considered to violate Islamic law. This study aims to study the transactions that we know very little about so that we can run them by existing regulations. This study uses qualitative methodology with descriptive research and an empirical juridical approach. The results in this study were related to regulations that are only listed in Fatwa DSN-MUI No. 96 of 2025 regarding sharia hedging, which is not clearly explained. Hedging is implemented so that there are gharar, maisie dan riba’ in it, but this becomes a polemic because it should be a form of application of Sharia principles in Indonesia.
 Keywords: derivative transactions, Sharia hedging, regulation

CEO Ownership, Risk Management, and Bank Runs at Unlimited Liability Banks During the 1890s

CEO Ownership, Risk Management, and Bank Runs at Unlimited Liability Banks During the 1890s

책임보험의 중복과 공동불법행위의 구상권

As indicated in the ruling at issue, the contribution right arising from the underlying torts and the right of contribution arising out of overlapping insurance coverage coexist and can be exercised simultaneously, in competition, or successively. However, once one contribution right is satisfied, the other is proportionately diminished. The decision at issue, clarifying these legal principles and providing a specific method for calculating the amount of subrogation claims, is significant as a case of first impression on these issues.
 This paper’s main arguments can be summarized as follows: 1. In liability insurance, it is crucial to consider concepts such as the insurable interests, the sum insured, and the amount of insurance coverage. Especially when unlimited liability insurance is one of the overlapping insurances, or when both are unlimited in liability, determining the amount to be paid respectively by the insurers, which serves as the basis for apportioning compensation liability among insurers, becomes unfeasible.
 2. It is questionable whether the direct contribution rights among insurers are acquired from the subrogation of the right of insured or from the direct claim rights of the victim. The author maintains that this contribution right among the insurers arises from the internal relations among multiple obligors liable to the victim. This right therefore is sui generis.
 3. The exercise of contribution rights among insurers involves separating the portion of liability attributable to the fault of the other party, and claiming the share of the overlapping insurance portion remaining after the first contribution. However, the result of the calculation remains the same, whether the proportion of overlapping insurance is applied first to the entire compensation liability or not.
 4. The right of contribution concerning the torts and the right concerning overlapping insurances are independent and separate causes of action, however, they should be treated and managed in litigation process without any contradiction.

Opening Pandora’s Box: Strict Liability Under Unqualified Extended War Clauses in International Investment Law

There has been a growing interest in the extent to which international investment law imposes an obligation on the state to compensate for losses arising from an armed conflict. This contribution explores the prevalence of war clauses that hold the state liable to pay compensation for war losses without the investor needing to prove fault. The contribution considers a recent case against Syria in which an investor was permitted to rely on such a war clause in another treaty through the most favoured nation (MFN) clause. The contribution finds that MFN clauses substantially increase the number of investors who can rely on unqualified extended war clauses. It considers unqualified extended war clauses and the extent to which other investors can rely on them through an MFN clause in Cameroon, Syria and Yemen. It then considers the role that the BRICS countries can play in bringing about the necessary reforms to unqualified extended war clauses. It argues that these reforms are urgently needed as these states emerging from armed conflict can scarcely afford to meet their people’s most essential developmental needs, let alone virtually unlimited liability to foreign investors.

The capital maintenance regime matters for creditors

Relying on an unbalanced panel of 25,211 observations of Polish unlisted companies for the period 2005–2018, we employ panel data analysis to investigate the role of the capital maintenance principle in securing creditors' interests. We document a persistently higher level of indebtedness among firms that adhere to the capital maintenance regime. Although the strength of the relationship is contingent on debt maturity, capital maintenance is found to be significant for both adjusting creditors, who can adjust the terms of the loan contract correspondingly to the credit risk and non-adjusting creditors. Unlimited liability is shown to eliminate the need to maintain legal capital, thus demonstrating the notable role of legal capital in safeguarding creditors’ interests in cooperation with limited liability companies. In contrast to the viewpoint of advocates for abandoning legal capital requirements, we show that legal capital remains an important mechanism for ensuring compatibility in incentives between shareholders and creditors.

A Smithian Reading of Chilean Free Banking

Abstract In the second half of the nineteenth century, the Chilean free banking system worked similarly to how Adam Smith describes the eighteenth-century free banking system in Scotland. The characteristics of free banking that Smith identifies as conductive of successful outcomes—free entry, unlimited liability, and convertibility on demand—are present in both Scotland and Chile. And the Chilean system failed for similar reasons to the worries Smith had about the Scottish system: inconvertibility, legal tender, involvement with government borrowing, and lobbying. The Chilean experience of free banking appears to follow Smith's account of free banking.

THE CROSS-BORDER CAVITY OF THE INSOLVENCY & BANKRUPTCY CODE, 2016

With globalization, there has been widespread international trade. In modern globalised world, a corporate is allowed to grow domestically and internationally. In case of Insolvency, the problem arises in international scenario and not at domestic level due to change in laws and jurisdiction. When a corporation crosses boundaries, the applicability of domestic law is out of scope and in that case the nations involved have to carve out the relevant law. The 2016 Insolvency and Bankruptcy Act (IBC), which offers a consolidated framework for the insolvency of companies, limited and unlimited liability partnerships, and individuals. But this cross-border aspect of insolvency law remains unclear in India as IBC does not properly deal with these issues. An attempt was made in this direction by inserting two provisions in IBC at last minute to resolve cross-border issues viz. “Agreement with foreign countries” and “Letter of Request to a country outside India in certain cases”, but these provisions proved out to be inadequate and of little assistance to institutions dealing with cross-border insolvency. The Insolvency Law Committee constituted by the Ministry of Corporate Affairs, recently came out with recommendations on international insolvency. It has suggested implementing the 1997 UNCITRAL Model Law on Cross-Border Insolvency. This paper will outline the general principles of the UNCITRAL Model Law and analyse the difficulties of cross-border insolvency in the Indian context.

Realitas Prinsip Piercing The Corporate Veil dalam Mewujudkan Good Corporate Governance

. The purpose of this article is to establish the development of the legal theory and doctrine of Piercing The Corporate Veil in the law on limited liability companies. The legal reform of legal persons can be traced back to two milestones in the history of legal persons, namely, firstly, the emergence of the theory of legal persons, which focuses on the personalization of legal persons as if they were persons, and secondly, the emergence of the corporate law doctrine known as Piercing the Corporate Veil, which is motivated to reveal the legal veil of the persons behind the company, namely, shareholders, directors and managers. The research method is normative law with a normative approach), concepts and cases. The results of this study can be attributed to the fact that the principle of piercing the corporate veil supports the implementation of the GCG to prevent the abuse of shareholder power. The principle of piercing the corporate veil can limit or prevent unlawful acts committed by shareholders, commissioners and directors who exploit corporate opportunities for personal gain or misuse of corporate assets. The conclusion of this study is that the legal effect of the principle of piercing the corporate shield on the liability of the PT, if violated, has the effect of limiting the liability of the company to unlimited liability (unlimited liability) up to the personal assets of the shareholders.

Unveil the veil of limited liability: Evidence from firm investment

AbstractWe investigate the effect of limited liability on firm investment. We find firms that intend to borrow but have higher risk have a greater probability of changing to limited liability. With propensity score matching, difference‐in‐differences analysis, and switching regressions with an endogenous switching model, we find that, after the liability regime change, firm investment aggressiveness decreases but on a lesser level than the over‐time change for firms using unlimited liability. We also find there is improvement in investment efficiency and return on invested capital. These results suggest that limited liability encourages firm investment and leads to more effective investment policies.

Облік і звітування: на шляху до ЄС і НАТО

The European integration course of further development of Ukraine determines the relevance of research on the implementation of EU legislation. This fully concerns the improvement of legislation in accounting and reporting. The article aims to define and substantiate the directions of further development of accounting and reporting in Ukraine in the context of the prospect of joining the EU and NATO. It was established that the requirements of the European directive on financial reporting apply only to joint-stock companies and limited liability companies. Taking this into account, an important direction for the further improvement of domestic enterprises' financial reporting is its compliance with EU legislation and a balanced differentiation of requirements for reporting enterprises of various forms of business. In particular, it is appropriate to reduce the amount of financial reporting for enterprises whose members have unlimited liability. Reunification of financial reporting requires corresponding changes in the statistics system. In the future, using financial statements for statistical generalizations will be inappropriate. It is also necessary to consider the changes made to the EU legislation in connection with adopting the directive on reporting on sustainable development. As a result, it is necessary to make appropriate amendments and additions to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” regarding the content and presentation of the management report and to carry out and publish an official translation of the European standards for reporting on sustainable development after they enter into force in the EU. The article reviews the principles of adaptation of International Public Sector Accounting Standards (IPSAS), considering the specifics of the activities of NATO entities. Considering the perspective of financing the post-war reconstruction of Ukraine and the course for joining NATO, it was proposed to gradually transition the public sector directly to International Standards (IPSAS). The provided proposals and recommendations contribute to the optimization of Ukraine's accounting and reporting system, in line with the country's integration into European economic and political structures.

CEO Ownership, Risk Management, and Bank Runs at Unlimited Liability Banks during the 1890s

CEO Ownership, Risk Management, and Bank Runs at Unlimited Liability Banks during the 1890s

EXISTENCE AND CHARACTERISTICS OF SOLE PROPRIETORSHIP IN INDONESIA

Sole proprietorship is the simplest business form and most used for Micro, Small and Medium Enterprises that has been dominating Indonesia’s economy. Sole proprietorship wasn’t a legal entity, therefore it has an unlimited liability. This become a consideration for entrepreneurs when they start a business. The issue discussed the existence and characteristics of sole proprietorship in Indonesia after Law 11/2020. This is a normative juridical research through a statutory and conceptual approach. The purpose of this research is to explain the characteristic of sole proprietorship in Indonesia and compares it with other Asian countries. The result indicates that sole proprietorship based on Law 11/2020 is a new legal entity as the concept expansion of Limited Liability Company with a limited liability that meets the criteria of micro and small business. It provides legality for entrepreneurs and a facility to access sources of funding. The regulation that determines sole proprietorship as a legal entity is only adopted by few countries like India.

Legal Institutions Regulating the Subject and Rules of Liability of Debtor’s Heirs: Comments on the Background of Polish and German Law Solutions

The article attempts to answer the question whether legal regulations regulating the aspect of the of succession law referred to in the title, i.e., the subject and principles of liability of the debtor’s heirs and the closely connected rights of the creditors, introduced by the Act of 20 March 2015 Amending the Act – the Civil Code and Certain Other Acts (official journal ‘Dz.U.’ of 2015, item 539), are sufficient. The considerations aimed at formulating conclusions were conducted on the basis of research methods appropriate to civil law. First of all, a formal-dogmatic method has been applied in order to present the current legal solutions and allowing, at a further stage of the considerations, to verify the research thesis and the underlying research hypotheses. In order to assess the degree of dissimilarity of solutions adopted in the Polish law, pertaining to the examined issue, with the solutions applied in other countries, the method of legal-comparative analysis was applied. For this purpose, the system of German law was chosen as, alike in the Polish law, in this legal system unlimited liability for inheritance debts is the rule. Some of the considerations were also based on the historical-comparative method and concerned mainly the discussion of other legal institutions known to the succession law relating to the scope and subject of the liability of the debtor’s heirs. These remarks referred primarily to regulations in force prior to the entry of the Polish Civil Code and the Code of Civil Procedure into force. The final part of the article presents conclusions and de lege ferenda postulates.

Micro financing Sole proprietorships in Narasapura and Kuppam

Sole enterprises are those that are run by single business owners. They employ around two to five assistants to help them manage their businesses .The single owner has unlimited liability and is responsible for all his profits and losses. In the era of market economics, where liberalization, globalization and privatisation has played a critical role in shaping the Indian economy, sole enterprises assumes special significance. Its more so in the smaller towns and areas situated closer to villages. In single enterprises the family members can also look after the business along with the main owners. But what was their main source of finance? As sole proprietorships were owned and controlled by a single businessman or business women the debts and losses was faced by themselves. So all the liability is their personal responsibility.So has micro finance come as boom to the deprived classes and uneducated masses to earn a livelihood. These are small loans for which a small around of interest is changed where the loan amount starts from 50,000 Rs and way extent to a cross or more. They charge a interest rate of 18% per annum .The main purpose of studying was to find out the impact of micro finance on the businesses of single proprietors. The other objective was to get an insight into socio economic status the wage rates and employment creation of single businesses. The research gap pertained to whether micro finance has fulfilled its objective of creating better financing options for sole enterprises.They are thoseentreprenuershipsthat are run by single business owners. They employ around two to five assistants to help them manage their businesses .The single owner has unlimited liability and is responsible for all his profits and losses. In the era of market economics, where liberalization, globalization and privatisation has played a critical role in shaping the Indian economy, sole enterprises assumes special significance. Its more so in the smaller towns and areas situated closer to villages. In single enterprises the family members can also look after the business along with the main owners. But what was their main source of finance? As sole proprietorships were owned and controlled by a single businessman or business women the debts and losses was faced by themselves. So all the liability is their personal responsibility.So has micro finance come as boom to the deprived classes and uneducated masses to earn a livelihood. These are small loans for which a small around of interest is changed where the loan amount starts from 50,000 Rs and way extent to a cross or more. They charge a interest rate of 18% per annum .The main purpose of studying was to find out the impact of micro finance on the businesses of single proprietors. The other objective was to get an insight into socio economic status the wage rates and employment creation of single businesses. The research gap pertained to whether micro finance has fulfilled its objective of creating better financing options for sole proprietorships.

Board of Directors’ Responsibility for Activities of A Limited Liability which Having No Legal Entity Status

The aim of this study is to find and analyzes the responsibility of Board of Directors of a Limited Liability Company (PT) operated the company and entered into legal relationship with third parties on behalf of the company when the company has not legally obtained the status of a legal entity. The focus study since business practice is always encountered with competition among entrepreneurs in the effort to gain profit in various unhealthy ways, thus it results in violations of laws and regulations. The research method was used was a normative legal study with a statutory, conceptual and analytical approach. The results of the study show that legal actions on behalf of the Company that has not obtained the status of a legal entity may only be carried out by all members of the Board of Directors together with the founders and members of Board of Commissioners of the Company. The novelty showed that every company need responsible for the company's damages or losses suffered by third parties having legal relationship with the company. Included for unlimited and mutual responsibility (jointly and severally). The actions of board of directors having exceeded their authority specified in the articles of association of the company, resulting in losses for the company shall not be considered as an action of the company. This loss will be the full responsibility of Board of Directors, as the limited liability company will turn into an unlimited liability.

Governance of Marwari capital: Daily living as a decolonial ‘matrix-of-praxis’ intermeshing commercial, religious and familial spheres

This paper is a narration on practices of unlimited liability Marwari businesses of a textile town in Western India. Although depicted as an ‘outdated’ form of incorporation, these businesses were surprisingly resilient prompting us to engage in exploration of their ways of doing business. We deployed Mignolo’s concept of colonial-matrix-of-power to anchor our interpretive sense-making of enactments of our participant businessmen. The daily doings of the businessmen and their families enacted a ‘way of life’, Marwaripan. Activities created an intermesh across ‘local’ spaces of family, business and religion, constituting, what we call, a decolonial matrix-of-praxis. It created a ‘local’ form of Marwari governance where circulation and access to capital depended on extensively (and labouriously) negotiated construction of ‘status’ within open spaces of ‘enunciation’. However, preserving Marwaripan also required arduous striving and collective toil to continuously construct subjectivities based on customary dharma through a communitarian pedagogy that could wean away actors from the state driven pedagogy of regular schools.

The Newly Sole Proprietorship as Limited Liability Company in Recent Indonesian Company Law

The recent Omnibus Law provides significant changing in the company legal order since the issuance of Government Regulation No. 8 of 2021. Under this GR, the sole proprietorship became a limited liability company. However, the liability construction of this newly born has not been regulated clearly and firmly and creates legal uncertainty. The purpose of this article is, first, to determine the appropriate liabilities of SPLLC (Sole Proprietorship as Limited Liability Company) and its founder, and second, to review and develop the legal mechanism for government to provide legal certainty. The study uses the normative juridical method with descriptive-analytical specifications. The study found that the absence of regulation on liability creates ambiguity and legal uncertainty on the appropriate liability for the new form of company. Finally, the study concludes that the appropriate liability of SPLLC and its founders should be determined firmly. Furthermore, three models of liability construction of the business owner are offered, including SPLLC with unlimited liability, SPLLC with limited liability, and SPLLC with certain liability.