KIL. Corporate Death

... How can we neutralize the power of artificial capital (ACP) via the diminishing value of economic rents (DER) and bound the immortality of a legal entity (LGE).

Corporations unnaturally live forever. What can be done about this.

Please keep in mind that we are speaking of Corporate Death and not Death TO the Corporation. Two very different things.

Corporations have clearly demonstrated their effectiveness in generating massive value for society. Our concern is their size and the length of their lives.

As we have discussed in the diminishing value of economic rents chapter, the accumulation of prefs and the predistribution of economic rents will give an advantage to areas of new business risk. New accounts will be a more attractive place to put capital.

Once a high number of prefs have been accumulated for a Legal Entity company, their future economic rents on capital will need to continually increase to keep money flowing into the corporation. If a younger corporation can produce the same widget for the same price, the money will flow more to the younger entity because it will provide a higher prefs percentage.

In this way, there will reach a point where it is wise for a corporation to sell its assets and distribute the cash to shareholders because attracting new business will be too hard. What about the prefs owned by the corporation? If the company ceases to exist, what happens to the pref payments made to the old entity? We have two options:

  1. Allow the account to continue to exist and prefs payments just pass through to pref owners. Accounts such as this can be labeled as 'passthrough' accounts and not be taxed.

  2. Distribute the owned prefs proportionally to the pref owners. This will result in heavy fracturing of prefs.

The first is probably the easiest to implement and straightforward for accounting.

What about the business owners that put up the initial capital. Doesn't this punish them and take value away from those taking the risk. It is my opinion that this should be one of the payment that is given for the privilege of limited liability and limited risk that they enjoy from the system. The buyers of their goods have also taken on a portion of risk in entrusting their cash to the company.

We believe that it is likely that many schemes will be figured out for the orderly transfer of assets from an old corporate structure to a new structure. We do not recommend annihilation, only the orderly transfer of power from old to young that we see in nature that allows for the general evolution of stronger and better fit to the environment.

In addition, stockholders can hold on to stock and issue distributions from pref payments received from the earnings of labor at new companies.


Allow for and plan for the death of each corporation. Provide a long life for the corporation but not unnaturally long.

Effects of corporate death can be mitigated via the Enrichment of Labor (LBR)

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