How Does The Liability Of Shareholders Differ From Other Business Structures?

Understanding Shareholder Liability in Different Business Structures

1. Private Limited Company: Shareholders in a Private Limited Company enjoy limited liability, protecting their assets from financial losses or legal issues.

2. Sole Proprietorship: In a sole proprietorship, the owner has unlimited personal liability for the business's debts and liabilities, risking personal assets.

3. Partnership: Partners in a general partnership share unlimited personal liability for the partnership's debts and liabilities, risking personal assets.

4. Limited Liability Partnership (LLP): In an LLP, partners' liability is limited to their capital contribution, protecting their personal assets to some extent.

5. Public Limited Company: Shareholders in a Public Limited Company also benefit from limited liability, safeguarding their assets.