Paper 2 · Forms of Enterprise
Shareholders in a public limited company enjoy limited liability, which means that they
Acannot sell their shares to another investor
Breceive a fixed dividend whatever the profit
Crisk only the amount they paid for their shares
Dare personally liable for all the company's debts
Explanation: The company is a legal person distinct from its members, so its debts are its own. A shareholder can lose the money invested in the shares, but creditors have no claim on private assets beyond that. Partners in the firm being converted had no such protection.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Specimen Paper, Q1