• 1 Marks

BL – Nov 2012 – L1 – SA – Q13 – Company Law

Identify the principle that protects shareholders after full payment of shares.

What principle states that once a member of a company has fully paid for his shares, he cannot generally be made liable for the indebtedness of the company again?

Limited liability

Explanation:
The principle of limited liability ensures that shareholders are not personally liable for the company’s debts beyond their investment in fully paid shares, protecting them from further financial obligations.

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