Limited liability means:

Question

Quizplus · Accepted Answer

Limited liability means that the liability of shareholders for company debts is normally limited to the amount they have paid for their shares. This protects the personal assets of shareholders. However, if the company fails, the creditors may have to bear greater losses than if they were dealing with a non-company, as the shareholders' liability is limited. Therefore, both option A and C are correct. Option B is incorrect as it refers to the liability of directors, which is not necessarily limited under the concept of limited liability.

Limited Liability Means