Corporations in the Empire

After my post aboutguilds and money in the world of the Shine Cycle, it’s time to talk about another side of the economic system: corporations.

Much as in our world, businessmen can form corporations to conduct their business as a body or to limit their personal liability for ordinary financial losses. Again as in our world, each corporation originally had to be individually authorized by an individual charter created by a legislative act of the government of each jurisdiction, but after the Justice Ministry’s reforms under Argentmentes, Rebecca, and Faith (and perhaps even before the arrival of the Chosen, they may simply be registered.

One major difference from our system, however, is that while forming a corporation can limit its founders’ financial liability in the case of ordinary business losses, the corporation is not treated as a single person for most criminal or even civil proceedings. Instead, every product, press release, accounting statement, etc., has a single person (or a group of individuals jointly) standing behind it; in the case of a bad design, a flawed product, slander, fraud, or the like, it’s not complicated to determine who took responsibility for the product (or whatever), and that individual or group is personally (and, if a group, each individually if necessary) liable for any criminal or civil penalties, unless he, she, or they can demonstratively prove that some other (specific) person or persons ought to bear the responsibility. (To reduce the case-load of the courts and improve employee morale, most corporations have the option of paying any fines for misdemeanors out of their corporate budget rather than finding and charging the individual responsible.)

Corporations are not as common in the Empire and its allies as they are here. The requirements for a charter to operate get a lot stricter at the higher levels of government (where a charter grants the right to do business in the many smaller districts that make up that level), so “multi-national corporations” are quite rare. And in exchange for the protection from ordinary fiscal liability, most jurisdictions require a certain amount of financial transparency, which tends to discourage the use of formal corporations where an informal association or a sole proprietorship or partnership would do.

Any questions or comments?

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