What is the meaning of limited liability in a limited liability company? What responsibility does the company undertake?

"Limited liability" means that shareholders are liable to the company to the extent of their capital contribution, which is limited liability. Shareholders have the responsibility to pay their capital contributions to the company on time. After the completion of its capital contribution obligations, it has completed all its responsibilities to the company. Shareholders are irresponsible for the company's debts and have no direct contact with the company's creditors. Limited liability system can reduce and transfer risks, encourage investment and overcome the restriction of unlimited liability on the development of enterprise forms. The limited liability system reduces the transaction cost and management cost, and promotes the efficient operation and development of the company. It plays an important role in the development of modern companies. It overcomes the personal bankruptcy risk brought by the bankruptcy of shareholders of unlimited companies, facilitates people to invest in shares, and is the most effective means to raise a large amount of social funds and set up large enterprises.

Limited liability is the symmetry of unlimited liability. It is the debtor who is liable for certain debts within the property scope stipulated by law. Limited liability can be divided into human limited liability and material limited liability. The former means that the debtor only takes a certain maximum amount of property as the liability limit. For example, the shareholders of a joint stock limited company are only responsible for all debts incurred after the bankruptcy of the company to the extent of their shares; The latter refers to the extent to which the debtor is only liable for specific property.

China's limited liability company refers to an economic organization registered in accordance with the Regulations of the People's Republic of China on the Administration of Company Registration, which is established by shareholders with less than 50 employees. Each shareholder has limited liability to the company to the extent of the capital contribution subscribed, and the company as a legal person takes full responsibility for the company's debts with all its assets. Limited liability companies include wholly state-owned companies and other limited liability companies.

A limited company is a limited liability company, and it is an enterprise legal person established under the conditions stipulated in the Company Law and relevant laws. Shareholders are liable to the company to the extent of their capital contribution, and the company is liable to the debts of the company with all its assets. Its main features are:

(1) Shareholders shall bear limited liability with their capital contribution;

(2) The company is liable for debts with its assets.

(3) The number of shareholders of the company meets the statutory requirements. A limited liability company shall be established by more than two shareholders and less than fifty shareholders. But as a special limited liability company, a wholly state-owned limited liability company can have one shareholder.

(4) The equity transfer shall comply with legal procedures and the provisions of the Articles of Association.

(5) The company cannot publicly offer shares or issue shares. The funds needed for the company's production and operation can only be obtained by other legal means.

In other words, if a limited company goes bankrupt and owes money to others, it only needs to auction off all the company's things, even if it is not enough, it will stop here and there is no need to pay it back. Unlimited liability company means that you have to pay back as much as you owe others. If the company doesn't have enough money to auction, you need to repay your private property.

Legal basis:

Company Law of the People's Republic of China

Article 3 A company is an enterprise legal person, which has independent legal person property and enjoys legal person property rights. The company is liable for its debts with all its property. Shareholders of a limited liability company shall be liable to the company to the extent of their subscribed capital contribution; Shareholders of a joint stock limited company shall be liable to the company to the extent of the shares subscribed by them.