Protections For Creditors And Investors Under U.S. Law
There are a few protections.
First, the Uniform Fraudulent Transfer Act, or the equivalent (there have been several versions of it, with slightly different names enacted in different states), as codified in a particular state's laws, protects creditors by making it a voidable fraudulent transfer to distribute money by dividend or gift, knowing that it does not have sufficient assets to pay its reasonably foreseeable debts that will be accrued in the future. See Section 4(a)(2)(ii) of Uniform Fraudulent Transfer Act.
Second, under the appropriate circumstances, which could be present for an undercapitalized company, it can be possible to "pierce the corporate veil" to protect creditors, by holding owners of the company liable for its debts. The bar to doing so is high, but it isn't impossible. This is usually a common law doctrine developed in case law, rather than a statutory protection.
Third, in an initial public offering of shares in a company that is going public, the Securities Act of 1933 (a federal law), require that prospective investors be provided with a prospectus which discloses facts such as the capitalization of the company, and which described the foreseeable risks associated with making an investment in the company. Failure to do so is securities fraud in which the investor is the victim.
In order to pass muster under the Securities Act of 1933, the prospectus would have to say something like:
This company is capitalized with $1000 of shareholder equity from
initial capital contributions. The pro forma expected expenses of
the company anticipate that it will incur expenses of $10,000,000 in
the first three months, at a time when this initial capitalization and
anticipated retained earnings are less than $10,000,000, and it is
anticipated that the company will not have sufficient liquidity to pay
its debts as they come due, causing it to default on those debt
obligations.
No sane person would invest in such a company, and a broker would probably breach their fiduciary and other legal duties to their customers by trying to sell shares in a company which had that statement in its prospectus.
It is a bit more complicated than this, however, because ordinarily, an initial public offering a stock is only subject to the Securities Act of 1933 when the amount invested in the company in the offering exceeds $1,000,000 or the stock will be listed on a stock exchange, so the case contemplated by the question would not be governed by the Securities Act of 1933.
But, there is a duty to disclose all material facts in connection with the sale of a security, even if the sale is otherwise exempt from securities regulation, under the Regulation 10b-5 of the Securities Exchange Act of 1934, and often also under a disclosure requirement created by state securities acts (colloquially known as "Blue Sky laws") would impose an equivalent obligation in an under capitalized company which was exempt from registration under the Securities Act of 1933 and the Securities Exchange Act of 1934.
Also, while most state securities laws, like federal securities laws, require only full disclosure and do not impose substantive regulation on the soundness of a prospective investment in a company, a fairly small minority of U.S. states do (or historically have, but have recently changed their laws) to impose some minimal substantive merit requirements on securities investments offered to the public. A grossly undercapitalized company with less than the equivalent of £50,000 of capital would probably fail to meet minimum state securities law requirements in the small minority of states that have merit review of securities offerings.
Fourth, while it is not a matter of law, in practice, all stock exchanges in the United States (there were about eight of them in the U.S., the last time that I checked, although a new one may have been added in Texas recently) have minimum capitalization requirements that are far greater than the equivalent of £50,000 (which is about $66,500 U.S. dollars as of the time this answer is posted).
A company arising from an initial public offering of shares in a company that raised less than the equivalent of £50,000, with fewer than 500 separate investors, when the company is not listed on any stock exchange, would not constitute "public company" as that term is defined in U.S. law in connection with the Securities Act of 1933 and the Securities Exchange Act of 1934. A company with such a small amount of capital invested by shareholders with fewer than 500 investors would be considered a closely held company under U.S. law.
A handful of state corporation laws which govern all corporations formed in that state including both closely held companies and privately held companies, do have minimum capital requirements similar to those of the Companies Act 2006 in the U.K., but this is considered archaic busy work, rather than a serious protection for investors.
Fifth, the accounting, legal, and brokerage firm work involved in going public in the U.S. typically costs something on the order of hundreds of thousands of U.S. dollars, and isn't cost effective to undertake unless the amount of capital raised in an initial public offering is at least in the millions of U.S. dollars. No rational person would pay that much for accounting and legal work to raise the equivalent of less than £50,000 in an initial public offering, and no reasonable accounting firm or law firm or brokerage firm would accept a client to do that work in such a tiny initial public offering, unless there were some very unique reasons to do so.
Sixth, it isn't inconceivable that someone who was selling shares to the public when it is known to be undercapitalized relative to its anticipated debts, even if this is disclosed in the fine print, knowing that some unsophisticated investors will not read that fine print, could conceivably be sued for state common law fraudulent concealment or prosecuted for fraud or theft under state law, since there was an intent to defraud the investors, particularly if there were some way that the promoters of the company received some personal benefit (e.g. officer and director compensation that depleted the modest initial capital of the company received from investors).
But this doesn't come up very often, simply because there are much easier ways to defraud someone out of less than $67,000 of money, if you are inclined to do so, than this kind of scheme, and most people competent enough to pull off this kind of scheme can make much more money than that by legitimate means without risking being sued or facing some sort of criminal prosecution for fraud or theft or securities fraud.
Gaps In Protections Under U.S. Law
I do not know if this is a requirement under U.K. law, but many countries require that newly formed limited liability entities, whether or not they are publicly held, have no only a minimum capital requirement but also a statutory minimum of liability insurance. Colorado requires this for law firms organized as limited liability entities.
It would be a violation of state law for a company not to obtain minimum levels of automobile insurance, worker's compensation insurance, and unemployment insurance (and, a violation of federal law in some cases not to have sufficient health insurance for employees in place).
But, this doesn't provide any remedy to creditors of the company or investors, if a company fails to do so (apart from a possible lawsuit against the managers and officers for failure to meet their minimum state law duty of care in the management of the company).
For example, I once had a case where a homeowner's association's governing instruments required the homeowner's association to secure a certain amount of insurance, and the board was advised that it was failing to do so, but refused to buy it anyway. But, the board members that refused to do so were still immune from civil liability and the homeowners who had to pay huge assessments when there was a severe hail storm to repair the damage caused by the storm, because the legally required insurance wasn't in place, were just stuck paying the assessment and had no legal remedies for this breached legal duty.
Neither federal law nor state corporate law in any U.S. state has an equivalent insurance requirement across the board (although there are requirements like this in specific licensed industries like law firms and nuclear power plants), although the failure of a company that is going public to have adequate liability insurance would be a serious risk factor that would have to be disclosed in a prospectus or private placement memorandum given to prospective investors under the Securities Act of 1933 and Securities Exchange Act of 1934, in the cases of companies that are going public or are public companies, and under Regulation 10b-5 and state securities laws, in the case of companies exempt from federal law. (Lack of adequate liability insurance would also probably not pass muster in the minority of states with merit based state securities laws that impose minimum substantive standards for securities offered to the general public.)
A disclosure in a prospectus or private placement memorandum that a company lacked adequate liability insurance would, as a practical matter, make these securities unmarketable to any even modestly competent investor, particularly if the company has any plausible exposure to liability, which almost any active business more tangible than a mutual fund or exchange traded fund (EFT) or cryptocurrency offering usually would.
So what?
As a practical matter, there are businesses that default on their debts every day, and there are businesses whose investors lose some or all of their investment, every day.
For the most part, the underlying rule in U.S. law is caveat emptor (i.e. "buyer beware"), and people who extend credit to limited liability entities, or invest in them, know that they are assuming a risk that the debts that are owed to them will not be repaid, and that the investments made by them will lose some or all of their value.
The legal and economic system in the U.S. mostly relies upon the due diligence of people extending credit to limited liability entities (or to anyone really), to try to protect themselves from the natural consequences of lending to someone who isn't creditworthy, and upon the due diligence of investors, to try to protect themselves from losing money on their investment. Creditors and investors who are careless in failing to do this face a higher risk of suffering the natural consequences of their laziness by failing to engage in this due diligence.
So, instead of focusing on governmentally imposed preventative measures, the U.S. legal and economic system relies mostly upon the skepticism and care of people doing business with each other to prevent them from suffering economic harm in those transactions.
At some point, the economic benefits of preventing harm by reducing risk is outweighed by the economic costs of complying with those preventative measures and by preventing the upside of transactions that involve risk from occurring.
U.S. law, in general, is slightly more tilted in favor allowing creditors and investors to take risks in order to allow creditors and investors to receive the upside of those transactions when the risks pay off, than U.K. law.
If a company has less than $67,000 of capital, often spread over multiple investors, there is only so much harm that any one investor can suffer if the investment goes bad because the investor did inadequate due diligence, and the legal and economic system in the U.S. simply isn't that concerned if this happens now and then.
Likewise, if a creditor is harmed by extending credit to an uncreditworthy company without due diligence, and without obtaining personal guarantees from the company's owners when due diligence reveals that the company itself isn't creditworthy, the legal and economic system in the U.S. simply isn't that concerned if this foolish creditor gets burned now and then.
And, sometimes a creditor's failure to do due diligence isn't foolish. Some creditors have a business model based upon not spending money on due diligence in underwriting its extensions of credit, knowing that debtors will often default, in exchange for charging high interest rates, or structuring non-lending extensions of credit (e.g. sales of goods on credit) with very high profit margins per sale, sufficient to cover the costs of the bad debts as a cost of doing business. This is, for example, the usual business model of hospital emergency rooms.
Other creditors protecting their interests in loans to uncreditworthy companies by securing the debt with collateral or obtaining personal guarantees or guarantees from third-parties.
Most firms that extend significant amounts of credit to small, limited liability businesses require personal guarantees from the owners as a condition of doing business. Similarly, most student loans and most unsecured small business loans, each of which is made to highly uncreditworthy borrowers, exist mostly because the government guarantees those loans. And, low down payment mortgage loans are economically viable to make, despite the risk that the collateral won't be sufficient to cover the debt if home prices fall, in part, because private mortgage insurance companies guarantee those debts in exchange for mortgage insurance premium payments that are paid by the mortgage loan borrower.
