Case | HBS Case Collection | December 2007

Ruling the Modern Corporation: The Debate over Limited Liability in Massachusetts

by David A. Moss and Eugene Kintgen


In 1830, Governor Levi Lincoln, Jr. urged the Massachusetts state legislature to introduce a limited liability regime for manufacturing corporations similar to that adopted in neighboring states. At least since 1809, shareholders in the state's manufacturing corporations had faced unlimited liability, which held shareholders personally liable for corporate debts. While unlimited liability was meant to ensure financial prudence, Lincoln and others worried that this policy was doing more harm than good and driving capital from the state. With the governor pushing for action, it was up to the state legislature to decide how to proceed.

Keywords: Capital; Debt Securities; Legal Liability; Production; Business and Shareholder Relations; Manufacturing Industry;


Moss, David A., and Eugene Kintgen. "Ruling the Modern Corporation: The Debate over Limited Liability in Massachusetts." Harvard Business School Case 708-016, December 2007.