Liability shields aren’t about knowingly committing illegal activity. They don’t protect against that. You can’t just form a company and hire people to rob banks or whatever.

Companies are to shield people from unknowingly or accidentally causing damage or committing a crime, and losing more than the capital already invested. Think situations like ‘I hired a driver, and he got drunk when I wasn’t looking and accidentally ran someone over’.

Without a liability shield, every investor or manager/owner of that company could lose everything, even if there was no way they could have known or prevented the problem - except by literally not having done business at all.