Shareholder Liability
/ˈʃɛrˌhoʊldər laɪəˈbɪləti/
Definitions
- (n.) The legal responsibility of a shareholder to cover a corporation's debts or liabilities, usually limited to their investment amount.
In most cases, shareholder liability is limited to the amount they invested in the company.
- (n.) Situations where shareholders may be held personally liable beyond their investment, such as in cases of fraud or piercing the corporate veil.
The court imposed shareholder liability because the shareholders were found to have committed fraud.
Forms
- shareholder liability
Related terms
See also
Commentary
Generally, shareholder liability is limited, but exceptions arise in specific circumstances like veil piercing, making it a critical concept in corporate law.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.