Massachusetts and Rhode Islands geographic characteristics made them

Massachusetts and rhode islands geographic

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Massachusetts and Rhode Island's geographic characteristics made them particularly attractive for obtaining textile factories. Their physical features offered great benefits to operating textile industries in their region. In addition, both states had relatively dense populations that could support manufacturing textiles in the region. Also, most of the workers, which were poor farmers, thought that factory work was more appealing than farm work so there was an abundance of workers willing to work. When Chief Justice Marshall said that corporations have two important properties- "imortality" and "individuality" he meant that corporations can be both a mortal or immortal. Unlike people or partnerships, corporations could survive when one of their founders dies giving it immortal features. However, they also obtain the ability to sue and be sued just like a real, regular individual. For the first three decades of the new nation, the states granted companies that promised to develop vital infrastructure the most charters to become corporations. They granted these physical and financial charters to banks, water supply companies, insurance companies, canal companies, toll-bridge companies, and turnpike companies. The New York law with general incorporation differed from other states with special incorporation because their law incorporated a provision that limited shareholder liability. Previously, the manufacturers in the industries had to have special approval, where they would appease and payoff the legislatures in order to incorporate an enterprise. However, New York's
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law differed in that it allowed for entrepreneurs to bypass the legislature, granting new applicants approval if they met a minimal standard that was set in the guidelines. The supporters of limited liability claim that it does promote business because it promotes investment and grows the state's industrial base. Shareholders can hold shares in more companies knowing that they won’t lose everything because they are backed by limited liability. Limited Liability encourages excessive risk taking because with whatever investment or risk you take you are guaranteed that you won't lose everything. So you can ultimately invest in many different corporations and not have to worry about losing all your personal assets. However, in contrast, unlimited liability does not encourage excessive risk taking because you could always be right on the edge of losing everything. The investors and company bear the risk in a world of limited liability because at the end of the day both of them either profit or fail. The investors are contributing their money into a cause they deem profitable so they take on risks every time they invest. The company and company reputation also bears the risks in a world of limited liability because when they do well they get more money and investments but when they fail they are don't make money and lose current and future investors.
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