The potential liability for any company is big enough that limited liability is necessary. No one would start company if they could lose all their assets not just ones invested in company.

Are people confused that limited liability limits the liability of the company? Because limited liability means that the liability of the owners is limited to their investment. The company can go bankrupt from losing lawsuit.

For certain things the individual owners shouldn't be shielded from liability. Medical privacy is one of those.

Otherwise you end up with people who can create as many harmful businesses as they want and just walk away when it explodes, ignoring everyone caught in the shrapnel. I'm 1000x more concerned about the effects of harmful companies than whatever friction it creates for starting new companies. Everything already moves too fast, it would be far preferable to have fewer corporations if it meant they were of higher ethical behavior.

> The potential liability for any company is big enough that limited liability is necessary.

No, that's what insurance is for.

> No one would start company if they could lose all their assets not just ones invested in company.

Companies operated before the concept of Limited liability was even invented.

We have records of successfull companies from year 578, like Kongō Gumi, in Japan.