1, unlimited liability, when all the property of the enterprise is not enough to pay off the debts due, the investor should pay off with all his personal property, which actually combines the responsibility of the enterprise with the responsibility of the investor; Limited liability, the responsible person shall bear the responsibility with part of his property.
2. The limited liability system can reduce and transfer risks, encourage investment, reduce transaction costs and management costs, and promote the efficient operation and development of the company. Unlimited liability has certain restrictions on the development of enterprise forms.
According to the Company Law of China, companies are divided into limited liability companies and joint stock limited companies. Whether it is a limited company or a joint-stock company, their biggest feature is that shareholders' responsibility to the company is limited and limited by their capital contribution. That is to say, when the company's assets are insufficient to repay the debts owed, shareholders do not have to bear joint and several liability for repayment, that is, they do not need to pay debts for the company.
4. Compared with a limited liability company, an unlimited liability company means that shareholders bear unlimited joint and several liability for the company and its debts. In other words, if the company can't repay its debts, the shareholders should bear the responsibility for repayment. In China, it is not allowed to set up unlimited liability companies, but it is allowed to set up unlimited liability enterprises, such as sole proprietorships and partnerships. These enterprises are not independent legal persons, so they cannot become companies, and the owners of enterprises directly bear unlimited corporate responsibilities.
Legal basis: Article 38 of the Partnership Enterprise Law of People's Republic of China (PRC). The restrictions imposed by a partnership on the rights of partners to carry out partnership affairs and represent the partnership externally shall not be opposed to an uninformed and bona fide third party.