Owners take the profits but have transferred much of their risk to other people, to suppliers, customers and employees. What we see is a system where owners enrich themselves by using and risking other people's moneys. Customers Losing Out Some companies are now so large and so many people have been affected at once that companies have been compelled by public pressure to make arrangements for compensating those losing out. Their trade associations have created funds for compensating customers for losses incurred as a result of a trader's insolvency. These funds are formed and replenished by collecting contributions from the trade association's member companies.
Trade associations hold funds which are then paid out to angry customers.
The funds are collected from their member companies. The member companies recover the extra cost from their customers by increased prices. Once again we see that owners have passed their risk to others, have in this way merely spread the losses among all their customers, are getting their customers as a whole to pay outstanding debts of insolvency. The owners and directors of that insolvent company may then at small cost register another company under a new name and continue trading under the new name, with similar results and more losses to the public. While directors may be prohibited from holding office in certain circumstances, it would seem that such provisions do not at present effectively protect customers, suppliers and employees.