- 1 Marks
Question
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?
Answer
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.
- Tags: Corporate Structure, hareholder Liability
- Level: Level 1
- Topic: Company Law
- Series: NOV 2012
- Uploader: Theophilus