Business 'structures' in the US and other countries

[SplishSplash]

I used 'structures' because I couldn't think of a better word.

Okay, here's what I've been asking myself for a while:

If you start a business, have some (serious) liabilities, and the business fails, what happens?
Do they come after your personal belongings, essentially making you broke for life or at least quite a few years?


In Germany, we have quite a few different structures. Some examples:

Companyname, GBR
A private company, an entity you put money in, but if it fails, you're responsible for all liabilities.

Companyname, GmbH
"Company with limited liability"
A so called 'capital company'. You have to put at least € 25,000 into it, and supposedly you're not responsible for the liabilities when it goes tits-up.
In fact, however, there is something called "manager's liability", making the manager responsible for the liabilities. So it doesn't really offer much protection. Only stupid people think it does, because many people don't know about "manager's liability".
Manager's liability isn't really in the law (or at least only for "Managers who act very irresponsible", ie stealing from the company), but the courts constructed it, probably forced by big$ banks who wanted their money back.

Companyname, AG
Publicly traded company with CEO, Board, etc...
You have to put at least € 50,000 into it, and supposedly you're protected from liability. However, courts have used manager's liability in this case as well.



So essentially, if you want to start a company without the (high) probability of living the rest of your life as a bum, you better already have a lot of money to start at least an AG. (And even that isn't guaranteed)
I think that's a big part of the problem why Germany's economy has slowed to a crawl. Nobody dares to go ahead and do something, because it will probably turn against you.

Now I was interested in the business models of other countries.
Imagine you'd start a company, what options do you have and what would happen if you go broke?

[dmmh]

over here, its about the same

[Nightshade]

It's very similar in the States, the private business would be one that you own and operate yourself, assuming all the liability.
Then there's the US equivalent of the GmbH, the Limited Liability Corporation, or LLC.
Then there's the actual corporations: Fuckhead Industries, Incorporated.

[SplishSplash]

How are liabilities handled with LLC and Inc.?
Are you fucked if you fail?

[Nightshade]

Well, in the first case, the owner operator assumes all liability. So, you'd need private insurance to keep from losing all your personal property in case you lost a lawsuit against your business.
In the LLC, there are limits (as you'd expect) to how much you can personally lose if someone sues you.
If it's a corporation that loses a lawsuit, your personal holdings are immune, unless you benefitted from doing something blatantly illegal, ala Enron.

[dmmh]

ima private business

[SplishSplash]

That's how it was supposed to be over here, but the concept got fucked over by manager's liability.

[Dekard]

theres always bankruptcy..