What is the biggest risk for the shareholders of a limited company?

Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation according to law.

Due to poor management or its legal status, shareholders must bear corresponding risks:

1. Investment loss risk

Shareholders have the obligation to contribute to the company, but their contribution may not be recovered.

2. The risk of not getting benefits

After shareholders make contributions to the company, they will get profits and get returns if they operate well. If the company is not well managed, there will be no profit or loss, and shareholders will not get any profit, which is also a risk.

3. Legal risks

Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation. Shareholders of a company who abuse the independent status of a company as a legal person and the limited liability of shareholders to evade debts and seriously damage the interests of creditors of the company shall be jointly and severally liable for the debts of the company.

legal ground

Article 20 of the Company Law

Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation according to law.