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> With limited liability the investors are never liable for the debts. Yes, assuming you meant "shareholders" rather than "investors"—creditors are also invest
by nybble41 6y ago
> With limited liability the investors are never liable for the debts.
Yes, assuming you meant "shareholders" rather than "investors"—creditors are also investors, having put money into the company with the expectation of a return, but would not be liable for borrowers' debts regardless of limited liability. It's the shareholders who are shielded from liability to the corporation's creditors. But the creditors know this and accept the risk as a cost of doing business with a limited liability corporation. If they don't like the corporation's prospects they are not obligated to extend credit.