Who Is Liable for Debts in a Limited Company?

A limited liability company is a legal person and will be solely responsible for debts the company incurs. However, in some cases, shareholders may be held liable for debts up to the nominal value of their shares, i.e., the capital initially invested in the company. Misfeasance, like fraudulent or wrongful trading, can also ‘pierce the corporate veil’ of limited liability and subject company officers or directors to personal liability for company debts. Depending on why the company is in difficulty, there may be other associated personal claims, including breach of fiduciary duty, breach of trust, unjust enrichment and tortious conspiracy claims.