Shareholders of a company are liable for the acts of the company.

Explanation

You can be confident by the very fact that, as a stockholder, you have got ‘limited liability’ for the debts of the corporate. which means you're solely chargeable for company debts up to the worth of your shares.



More merely, the sole cash you risk losing if the corporate ought to fail is that the cash you set in.



This is all right down to the principle of separate legal temperament. once a business is incorporated i.e. it becomes a personal company (LTD), public company (PLC), or liability partnership), the corporate and its shareholders become 2 separate legal entities. the corporate becomes chargeable for its own finances and assets, that aren't tangled with the private finances and assets of its shareholders.