48 Tul. L. Rev. 989 (1973-1974)
Limited Liability of the Individual Trader: One-Man Company or Commercial Foundation

handle is hein.journals/tulr48 and id is 1029 raw text is: LIMITED LIABILITY OF THE INDIVIDUAL TRADER:
The weight of tradition always bears very heavily on legal in-
stitutions. Tradition places special obstacles in the way of the ac-
ceptance of new concepts, even though, when considered without
prejudice, they appear to be obvious and valuable means of achiev-
ing useful ends. The view that only concepts that have been be-
queathed to us by past generations are authoritative and inviolate
leads us to operate with old institutions, even when their structure
and objects must be distorted, rather than consider impartially the
adoption of new formulae.
An outstanding example of this phenomenon seems to occur in
the use of the principle of limited liability to facilitate the partici-
pation of individuals in commercial enterprises. All the traditional
forms of company enable the participants' own assets to be free of
claims for the debts of the company beyond the amount the par-
ticipants initially paid, subscribed, and committed themselves to
pay. Yet, this benefit of limited liability, which seems so natural
even when one is thinking of a company that may have as few as
two members, is today apparently quite unthinkable if the com-
pany has only a single member.
If, in a perfectly ordinary joint-stock company having perhaps
the paltry minimum capital required by Italian law of one million
lire, A and B limit their liability to one-half million each--or A to
999,900 lire and B to 100 lire-all is in order; but it is otherwise
today if a multimillionaire wishes to limit his involvement in the
fortunes of a business he wishes to start to some 100 million lire.
I say today, because I am confident that in the future we will
be released from the restriction that limited liability may only ex-
ist in a company with a plurality of members, and it will be a mat-
ter of routine for a single individual to commit part of his assets
distinctly, and in terms of liability exclusively, to the exploitation
of some specific activity.
Even today there is no doubt that in every country there are
companies of convenience, which are promoted by or reduced to,
in substance if not in appearance, a single member; but there are
those who are quick to consider such entities as the product of an
abusive and faulty practice that should be proscribed. Of course
* Professor of Law, Universit& degli studi di Milano; Director, Instituto di
diritto privato Italiano e comparato.

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