The liability of shareholders in 'limited liability' companies means:

Question

Quizplus · Accepted Answer

Limited liability means that the shareholders' liability is limited to the amount of share capital that they have not paid for. They are not personally liable for the debts or obligations of the company beyond this amount. Hence, option B is the correct choice. Option A is incorrect because the amount of contribution is not based on the current market price of the shares; rather, it is based on the unpaid amount on the shares. Option C is incorrect because in the case of company default, creditors can call upon shareholders to contribute their unpaid share capital. Option D is incorrect as shareholders have the right to participate in the management of the company to the extent permitted by law or the company's articles of association.

The Liability of Shareholders in 'Limited Liability' Companies Means