Stoopid Business Help!

[SauD~]

Can anyone help me in business?
i just don't really understand the "limited liability"
The definition of Limited liability is:
                                             In case of insolvency or loses, the amount of debt will not exceed the actual amount of investment in the business by the shareholder.

can anyone explain it to me?   and Does the owners get the limited limitably advantages? how?

Thanks 

[elemis]

With regards to unlimited liability : If a business has debts that it cannot pay then its creditors by law can cease the firm's assets AND the owner's assets to pay off the debt.

In the case of LIMITED LIABILITY, the owner's liability to pay off any outstanding debts is limited to money invested into the business.

The creditors CANNOT cease the owner's personal assets.

[SauD~]

With regards to unlimited liability : If a business has debts that it cannot pay then its creditors by law can cease the firm's assets AND the owner's assets to pay off the debt.

In the case of LIMITED LIABILITY, the owner's liability to pay off any outstanding debts is limited to money invested into the business.

The creditors CANNOT cease the owner's personal assets.

Thanks
so they do have to pay later, right?

[$tyli$h Executive]

^ As Ari said.

so they do have to pay later, right?

No. Whatever they have to pay cannot exceed the firm's assets.

[SauD~]

^ As Ari said.

so they do have to pay later, right?

No. Whatever they have to pay cannot exceed the firm's assets.

hmm, the left amount will never be paid to suppliers?
even, if they made lots of profits

[$tyli$h Executive]

hmm, the left amount will never be paid to suppliers?
even, if they made lots of profits

It will be paid back. If such a situation arises, the creditors will take over the business (bankruptcy court will be an intermediate step). If its a public limited company, new bonds/securities would be issued to investors by the creditors, whose money will be used to cover the debt.

If its not, the creditors can take over the business themselves, sell its assets, or sell the debts to new investors.

[Most UniQue™]

limited liability is that the owners of the company,the shareholders, will not be held responsible for any debts owing,their liability is limited to the amount invested in the business