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A pass-through entity with no assets should not be allowed to conduct any business where they might incur long-term liabilities.



I’ve thought about a system where a company has to purchase liability insurance when they dump assets.

So if a plant has a chemical leak, the company can’t sell every other plant, pay a huge dividend, and then declare bankruptcy to avoid paying damages. The plant would have to be insured for up to the total dividend payout. The insurance company would charge a huge fee based on what they think the plant will end up costing after a court battle, etc.




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