Eli5: why the shareholders in a company are not liable to pay debts owed by the company?
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It’s because of something called “limited liability.” Basically, when you buy shares, you risk the money you put in, but not your personal assets. If the company goes belly-up, the worst that happens is your shares become worthless. You don’t have to sell your house to pay the company’s debts. It’s one of the perks of investing in stocks.
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