View article

LEGAL SCHOLARS have long been enthralled with the concept of limited-liability corporations. Butler's view of the importance of limited liability for shareholders may be overly enthusiastic; but he did not stand alone in his belief that limited liability was a highly important legal device. One of Butler's contemporaries, President Eliot of Harvard, regarded limited liability as" the corporation's most precious characteristic" and" by far the most effective legal invention... made in the nineteenth century." 2

The view, that limited liability is of central importance to the corporate form of organization has persisted over the years. Scholarly studies of corporations have retained that view." In the historical development of the corporation probably no single atrribute has been more significant than that of limited liability." 3" This attribute of limited liability... is regarded by most persons as the greatest advantage of incorporation. Indeed …