What is shareholder liability?

Shareholder liability refers to the situation in which you, as a shareholder, are liable in certain cases for the actions and debts of the company in which you hold shares.

This can, for example, arise when a new owner, after the sale of the company, performs unlawful acts, such as the non-payment of taxes that were already included in the purchase price.

In cases of fraud or mismanagement, shareholders can be held responsible, especially when the protection of creditors' rights is at stake.

This concept is comparable to director's liability, but focuses specifically on the responsibility of shareholders.