I am referring to the risk that investors face of losing all their assets (beyond what they invested in a company) in case the company fails. I don't understand why people would put up money for investments in such cases. Are you saying that insurance would cover them?
Not to belabor this but the idea of investors being shielded from losses beyond their risk capital was what gave the corporation its huge expansion over the years. That is how public companies came to be formed, for example.
Still not understanding how investors would be motivated to invest in most companies without such protection.
its pretty simple, corporate ownership/government fiat isn't the only way to protect investors that aren't willing to assume risk. you've done a good job of deconstructing most of this now just look at the pieces and see they are separate.
Not to belabor this but the idea of investors being shielded from losses beyond their risk capital was what gave the corporation its huge expansion over the years. That is how public companies came to be formed, for example.
Still not understanding how investors would be motivated to invest in most companies without such protection.