LAW REVIEW ARTICLE

Limited liability is one of the most successful commercial creations of all time, almost singularly responsible for the growth and expansion of capitalism.  Encouraging risk and promoting successful enterprise through both small and large businesses alike, limited liability has been the driving force behind economic success in the Western world and is one of the most celebrated legal creations of all time.  But what is it about limited liability that makes it so successful?  Indeed, is the structure of limited liability fair as regards creditors, who ultimately bear the brunt of this mechanism?

Limited liability in general means a sacrifice of privacy in return for the benefit of limited personal liability.  In layman’s terms, this means that the company promoter is not personally liable for any of the company’s debts, thus encouraging risk and promoting enterprise.  Read the rest of this entry »