limited liability

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Permalink Reply by Werner Reisacher on March 10, 2010 at 11:31am

Sole Proprietors and Partners in a Partner ship have a personal and illimited liability for consequences resulting from their business activities. This liabilitiy includes all of their business and personal assets. Limited Partnerships, Limited Liability Companies, S-Corporations, and C-corporations do have a limited liablity for consequences resulting from their business activities. In general, the liabiliity is limited to their investments in the company. (Loans and Equity). However, this rule applies only for business liabilities that are incurred by business activities that are in lin with existing fiscal and legal rules and regulations. Shareholders of limited liability companies might still be hold personally liable if the liability incurred is the result of their deliberately misleading and/or criminal actions.
Werner Reisacher

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Permalink Reply by Peter Quigley on March 11, 2010 at 3:41am

Werner has nailed it down.
Additionally, standard practice is to limit contractual liability at point of sale by careful drafting. So in (say) a 50m deal, the amount of recovery in the event of being sued, is up to 50m (max). However as HP/EDS (v. BSkyB) recently discovered, (in the event of fraud) such caps may not be effective.

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