Concept in the corpoate business world that protects stockholders from being liable for the debts of the business.
A simple way of understand this is that stockholders can ONLY lose what they invest; creditors of a business CANNOT go after the stockholders for the business's liabilities.
Basically a business can rack up a bunch of debt, go under, and not have pay the difference owed to creditors after liquidating.
This concept does NOT apply to family owned business AKA non-corporations.
A simple way of understand this is that stockholders can ONLY lose what they invest; creditors of a business CANNOT go after the stockholders for the business's liabilities.
Basically a business can rack up a bunch of debt, go under, and not have pay the difference owed to creditors after liquidating.
This concept does NOT apply to family owned business AKA non-corporations.
by Iconoklastic~ February 17, 2010