1. Limited to Unpaid Share Capital

• Shareholders are liable only to the extent of the amount unpaid on the shares they hold
  
• If shares are fully paid, their liability is zero, even if the company incurs losses or faces bankruptcy
  
• This protection encourages investment without risking personal assets
  

2. No Personal Liability for Company’s Debts

• Shareholders do not have to repay company loans or liabilities from personal funds
  
• The company is a separate legal entity, so creditors cannot sue shareholders individually for company obligations
  

3. Liability Does Not Change with Business Losses

• Even if the company faces heavy financial losses, shareholders are not held personally accountable
  
• Their maximum financial exposure is limited to their investment in share capital
  

4. Exception in Case of Fraud or Misrepresentation

• If a shareholder is involved in fraud, misconduct, or illegal activity, the corporate veil may be lifted
  
• In such cases, courts can hold shareholders personally liable under the principle of “piercing the corporate veil”
  

5. No Management Obligations

• Shareholders are owners, not managers
  
• They do not bear liability for day-to-day operations or decisions made by the board of directors