(Side note) You should look into voice acting. Your voice is pure gold and would be amazing for anime, radio, or commercials! I have connections with Funimation if you're interested. Aside from that, thank you for your lesson. It was very informative.
OMY IM A MALAYSIAN NEWLY BUSINESS STUDENT AND I'VE BEEN STRUGGLING WITH UNDERSTANDING LIABILITY IN GENERAL AND OMYGOD THIS HELPED SO MUCH MY GOD I'M SO THANKFUL THAT I KNOW THE ENGLISH LANGUAGE
@khanacademy Sal, Greetings from India. I really appreciate you doing videos that matter to general public in their day to day life. Like "Income Tax", "Life Insurance", "Diabetes" etc. Are you planning to do videos on computer science (programming and stuff). I am sure many people would love that especially considering that you have a BS and MS in computer science form MIT!
Ive read about 10 comments about how this is good for big corporations..Keep in mind if you were hurt by a corporation. Would you rather go after a single owner worth millions of dollars, or a corporation worth billions. Its not hard to see that in civil suit cases it makes more sense to hold the corporation with far greater assets accountable. Obviously there is a problem of never ending litigation, but thats another issue.
Except Uber drivers aren't employees, rather they are third party contractors. Therefore, are even further removed from the legal entity of the company.
The bottom line. Even though one person "ACTS" on behalf of the corporation. The corporation is still a group of people. This must be reevaluated in its term because as it is they are protected by this limited liability and destroying us. Monsanto is a perfect example.
But i was simply heard that proprietorship and partnership business have risk of unlimited Reliability but pvt ltd business have limited reliability then how this relates to this video because you haven't talked about Pvt ltd ?
You mean legal structure or company. Technically a corporation would either be an S corporation or C corporation. Limited liability companies are a form of legal and financial protection but they're not quite corporations though their member or members can file to be taxed as a corporation using IRS Form 8832. What most distinguishes this for me is how Limited Liability Companies are established through Articles of Organization while corporations are created through Articles of Incorporation.
Sal you might want to change your example to where Bill owns cab corporation and hires an employee who then commits the tort. In your example, Bill owns the corp and is the actual driver/tortfeasor. The actual driver who commits the tort is always liable for his own torts. The interesting question then is to what extent are the owners liable? The answer then is only to the extent the owner has assets in the corporation, assuming the corporate veil cannot be pierced by the soccer player.
In this video it is stated that the liability of the corporation is limited: this is not correct (even though the name of this legal category "limited liability company/corporation" appears to suggest otherwise). what is limited is the liability of each of the members of the company: their liability for the company's debts is limited to the amount of their participation (what they have invested or guaranteed when joining the company) in the company and they will therefore not be liable beyond such amount with, for example, any of their personal assets. Moreover, when this video tells us that the star soccer/football player is helpless against the limited liability corporation's taxi driver who accidentally injured him/her, it just simply ignores reality, namely the world of insurances: in practice, a corporation would hardly be allowed under any mandatory laws to carry out a business without proper insurance cover for damages to third parties; the same would apply in case the single individual does not set up a corporation and carries out his taxi driver business in his own name (he would still need an insurance for third party liability). Lastly, if one is a star soccer/football player, it is very likely that he/she have a personal insurance which covers any physical injury (on and off the pitch).
I love your explanation very simple and fun. But what is the difference between a corparation, LLC, Inc? I mean is there a difference advantages, disadvantages? Do you have to pay more taxes?
OMG YOU SAVED MEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE I HAVE AN EXAM NEXT WEEK AND I HAVE BEEN STRUGGLING IN THIS (i wasn't paying attention in class as always) THANK YOU SOOOOO MUCH :)
@PanzerDivisionBOM Rather then government, I ment to say ANYONE...IE When someone trys to Sue a corporation....But on to your point....ACTUALLY irresponsibility is discouraged MORE with limited liability then with... Scenario 1:No limited liability . A PERSON runs a company, the company dumps toxic waste into a river. WITHOUT limited liability, the corporation CAN NOT be held accountable. Only the person/people directly responsible.
Sorry, this has nothing to do with this video, which was very great and clear, but I think Sal just broke his record for repeating words (sometimes he might say "it it it" or "which -- which") at 4:41 with 9 his'.
Are the terms limited company and limited liability company the same thing or are they different? Someone please let me know soon, I have an exam next week. Thanks
Khan Academy Does the corporation have to go bankrupt? Could he say for example; Pay the 180k and later just reinvest personal assets into the business?
+Envious Clothing The debt remains in the name of the corporation. unless bankruptcy is declared any future transfer of funds to that corporation would be garnished to the debt owed to the player.
@PanzerDivisionBOM Scenario 2:WIth Limited Liability if a company is found to be dumping toxic into a river, THE CORPORATION IS HELD ACCOUNTABLE. The corporation CAN be sued WHILE ALSO taking the people who dumped the toxic account CRIMINALLY. My point being that Limited Liability holds ALL parties INCLUDING the corporation ACCOUNTABLE....Holding the Corporation accountable FINANCIAL and holding individuals accountable CRIMINALLY.
@PanzerDivisionBOM IF THERE WAS NO LIMITED LIABILITY DO YOU THINK THE GOVERNMENT WOULD BE ABLE TO GET HUNDREDS OF BILLIONS OF DOLLARS FROM THE OWNER OF THE CORPORATION? I DONT THINK SO....GENERALLY CORPORATIONS HAVE FAR GREATER ASSETS THEN THE OWNER SO LIMITED LIABILITY IS A GOOD THING, REMEMBER THIS IS AN EXAMPLE AND NOT THE NORM IN THE REAL WORLD.
This man the greatest teacher of all time bruh, I building a business and he still helping me
how is your business going?
(Side note) You should look into voice acting. Your voice is pure gold and would be amazing for anime, radio, or commercials! I have connections with Funimation if you're interested. Aside from that, thank you for your lesson. It was very informative.
i really had hard time undersanding what corporation meant but thanks to you I get it now. THANK YOU!!!!!
Thank you. This was a part of an assignment to watch your video.
OMY IM A MALAYSIAN NEWLY BUSINESS STUDENT AND I'VE BEEN STRUGGLING WITH UNDERSTANDING LIABILITY IN GENERAL AND OMYGOD THIS HELPED SO MUCH MY GOD I'M SO THANKFUL THAT I KNOW THE ENGLISH LANGUAGE
easy,simple and straight to the point
Single man teaching all branch and courses that's so great
@khanacademy Sal, Greetings from India. I really appreciate you doing videos that matter to general public in their day to day life. Like "Income Tax", "Life Insurance", "Diabetes" etc. Are you planning to do videos on computer science (programming and stuff). I am sure many people would love that especially considering that you have a BS and MS in computer science form MIT!
Great video thanks alot.
9:57 why i gonna bankrupt and what is bankruptcy how it works ?
Ive read about 10 comments about how this is good for big corporations..Keep in mind if you were hurt by a corporation. Would you rather go after a single owner worth millions of dollars, or a corporation worth billions. Its not hard to see that in civil suit cases it makes more sense to hold the corporation with far greater assets accountable. Obviously there is a problem of never ending litigation, but thats another issue.
Your amusement amuses me
FINALLY....I got to understand what is limited liabilty
So corporations allow rich people to escape responsibility? No wonder people criticize corporations for promoting irresponsibility.
his his his his his 4:42
you invented Uber...
Except Uber drivers aren't employees, rather they are third party contractors. Therefore, are even further removed from the legal entity of the company.
Thanks Sal! And thanks for the daily Facebook updates!
The bottom line. Even though one person "ACTS" on behalf of the corporation. The corporation is still a group of people. This must be reevaluated in its term because as it is they are protected by this limited liability and destroying us. Monsanto is a perfect example.
Wonderful explanation :)
But i was simply heard that proprietorship and partnership business have risk of unlimited Reliability but pvt ltd business have limited reliability then how this relates to this video because you haven't talked about Pvt ltd ?
thank you very much, this helped so much :)
Great explanation.
You mean legal structure or company. Technically a corporation would either be an S corporation or C corporation. Limited liability companies are a form of legal and financial protection but they're not quite corporations though their member or members can file to be taxed as a corporation using IRS Form 8832. What most distinguishes this for me is how Limited Liability Companies are established through Articles of Organization while corporations are created through Articles of Incorporation.
Sal you might want to change your example to where Bill owns cab corporation and hires an employee who then commits the tort. In your example, Bill owns the corp and is the actual driver/tortfeasor. The actual driver who commits the tort is always liable for his own torts. The interesting question then is to what extent are the owners liable? The answer then is only to the extent the owner has assets in the corporation, assuming the corporate veil cannot be pierced by the soccer player.
In this video it is stated that the liability of the corporation is limited: this is not correct (even though the name of this legal category "limited liability company/corporation" appears to suggest otherwise).
what is limited is the liability of each of the members of the company: their liability for the company's debts is limited to the amount of their participation (what they have invested or guaranteed when joining the company) in the company and they will therefore not be liable beyond such amount with, for example, any of their personal assets.
Moreover, when this video tells us that the star soccer/football player is helpless against the limited liability corporation's taxi driver who accidentally injured him/her, it just simply ignores reality, namely the world of insurances: in practice, a corporation would hardly be allowed under any mandatory laws to carry out a business without proper insurance cover for damages to third parties; the same would apply in case the single individual does not set up a corporation and carries out his taxi driver business in his own name (he would still need an insurance for third party liability). Lastly, if one is a star soccer/football player, it is very likely that he/she have a personal insurance which covers any physical injury (on and off the pitch).
his his his his his
his 7x
4:42 Thanks Obama
thanks sal ! :D
I love your explanation very simple and fun. But what is the difference between a corparation, LLC, Inc? I mean is there a difference advantages, disadvantages? Do you have to pay more taxes?
They are all the same. LLC stands for Limited Liability Corporation, and Inc. (incorporated) is the act of becoming a corporation.
There's also an LLC for the same reason, though differs with shares.
Don't trade in your leased car. Your lease is a valuable contract that protects both you and the leasing company.
OMG YOU SAVED MEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE
I HAVE AN EXAM NEXT WEEK AND I HAVE BEEN STRUGGLING IN THIS (i wasn't paying attention in class as always)
THANK YOU SOOOOO MUCH :)
@Mugwump720 He only invested $81k (cab+licenses+insurance)
@MindofScience3 an LLC is a type of corporation
@PanzerDivisionBOM Rather then government, I ment to say ANYONE...IE When someone trys to Sue a corporation....But on to your point....ACTUALLY irresponsibility is discouraged MORE with limited liability then with...
Scenario 1:No limited liability . A PERSON runs a company, the company dumps toxic waste into a river. WITHOUT limited liability, the corporation CAN NOT be held accountable. Only the person/people directly responsible.
Since when are Cars and houses assets? They're liabilities
Sorry, this has nothing to do with this video, which was very great and clear, but I think Sal just broke his record for repeating words (sometimes he might say "it it it" or "which -- which") at 4:41 with 9 his'.
anon anon 7*
Are the terms limited company and limited liability company the same thing or are they different? Someone please let me know soon, I have an exam next week. Thanks
That's because the legal definition of a "person" is a corporation..
so what proteced Bills liabiility wth his House, his car and investment assest. ?so that the soccer ply, couldnt sue for his assets.
In the 2nd situation, wouldn't the soccer player get 580k instead of 180k since Bill inveested 500k in the company?
Now you need to make a video about a history of FOOTBALL :D
Khan Academy Does the corporation have to go bankrupt? Could he say for example; Pay the 180k and later just reinvest personal assets into the business?
+Envious Clothing The debt remains in the name of the corporation. unless bankruptcy is declared any future transfer of funds to that corporation would be garnished to the debt owed to the player.
@PanzerDivisionBOM
Scenario 2:WIth Limited Liability if a company is found to be dumping toxic into a river, THE CORPORATION IS HELD ACCOUNTABLE. The corporation CAN be sued WHILE ALSO taking the people who dumped the toxic account CRIMINALLY.
My point being that Limited Liability holds ALL parties INCLUDING the corporation ACCOUNTABLE....Holding the Corporation accountable FINANCIAL and holding individuals accountable CRIMINALLY.
Can't the soccer player sue the driver of the car/cab?
The Indian guy on TH-cam ;)
They are amost above the law then?
@khanacademy Than I was confused. Thanks for the correction.
@khanacademy Oh, nevermind. I thought that you said he invested 500k in his business.
@PanzerDivisionBOM I dont see how your comment is in the slightest related to my comment....
@PanzerDivisionBOM IF THERE WAS NO LIMITED LIABILITY DO YOU THINK THE GOVERNMENT WOULD BE ABLE TO GET HUNDREDS OF BILLIONS OF DOLLARS FROM THE OWNER OF THE CORPORATION? I DONT THINK SO....GENERALLY CORPORATIONS HAVE FAR GREATER ASSETS THEN THE OWNER SO LIMITED LIABILITY IS A GOOD THING, REMEMBER THIS IS AN EXAMPLE AND NOT THE NORM IN THE REAL WORLD.
Watch "Inside Job" to see how this concept works really awesome for the major banks. :)
What's this app or software called?
First :D
his his his his his his...
!!!!!!! HOUSE AND CAR IS NOT AN ASSET!!!!!!!!!!!
you are great! thanks from Macedonia
his his his his his his