Limited liability means that shareholders cannot be held personally liable for the debts of the corporation, but may still lose the amount of their capital investment.

Question

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Limited liability means that the corporate investors cannot be held personally liable for the debts of the corporation. Thus, the most that an investor can lose is the amount of money used to purchase his or her shares of the corporation. This liability is maintained indefinitely so long as the corporation actually maintains its status as a self-governing, self-contained corporate person.

Limited Liability Means That Shareholders Cannot Be Held Personally Liable