BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -In a private limited company, the liability of each member or shareholder is limited. Therefore, even in the case of loss under any circumstances, its shareholders aren’t liable to sell their own assets for payment. Likewise, the personal assets of the shareholders are not at risk.

Detailed explanation-2: -Shareholders are not liable for company debts because a company is a separate legal person from its directors and shareholders.

Detailed explanation-3: -All limited companies, whether private limited companies (LTDs), public limited companies (PLCs) or limited liability partnerships (LLPs) are given limited liability upon incorporation. From the point of incorporation, shareholders liability is limited to the value of their shares.

Detailed explanation-4: -The general rule is that shareholders and LLC members are not personally responsible for debts and liabilities of a corporation or LLC: they can be held responsible only for the value of their investment in the entity. This is called limited liability protection and it is a matter of state law.