00:01
Hey guys, so today we're going to be kind of looking at the scenario on the board.
00:04
So we have here that the legislature of connecticut had passed a general incorporation law in order to curb the fear of investors.
00:12
Before this law had passed, investors were actually scared that big businesses were not really a safe place to invest their money, and we're going to try to explain why these investors felt this way.
00:22
So in order to answer this question, we kind of have to talk about the difference between unlimited and limited liability.
00:28
Basically, in early u .s.
00:31
History, and i'm sure in other places as well, it was a big issue for a big issue for firms was that corporations essentially had firms, was that firms had unlimited liability.
00:52
And what this basically means is that essentially if a number of a firm wants to raise money from a large number of investors, they went into issues.
01:09
So essentially in a corporation, like the owners of the firm, it would lose more money than the amount they had invested in the first place...