Corporations should have Duration

Ideas make the best gifts so here is one for everyone.

Now that corporations are individuals, they should also have a life span.  I suggest 20 years at which point they would be required to liquidate.  No exceptions.

Therefore, the idea would play out something like this:  small group of people have a bright idea for a business.  They get capital, incorporate, and start making their widget.   After three years of increasing sales, they go public, hire many new employees, and expand.  After many years of growth and prosperity, the company then must adjust to its looming termination date.  Maybe some employees jump ship while others wait to see what kind of buyout they might get at the end.  At 20 years, an auctioneer comes in and sells all the company assets.  The bondholders and shareholders are cashed out and people move on to the next business opportunity. 

What would this do for our economy? 

• It would create an atmosphere of competition and constant churn
• It would force businesses to stay relatively small and flexible
• It would force employees to stay competent in their skills and specialties.
• Corporate bonds would have a maximum duration of 20 years
• It would purge deadwood from the markets
• It would stifle monopoly development

 What would this do for our political system?

• Elected officials should also have term limits, say 20 years in national, state, or local offices.
• Wealthy people would have to use many corporations to influence the political process
• Tax laws would need to incentivize small business creation and ownership
• Public education and public health care systems would need more support

 As a transition to this process:

• The S n P 500, 400, 600 and Nasdac 1000 should be broken up into 30,000 companies.
• Private companies above a set cap limit should be broken up.
• A ban on mergers and acquisitions would need to be set for 10 years (except for when a buyer is participating in a liquidation sale).

To have full employment we need to have constant small business creation.

Small is beautiful in the business world.