Eli5: why the shareholders in a company are not liable to pay debts owed by the company?
In: 181
They are, but only up to the limit of what’s in the company assets.
When a company has financial issues, there’s an order on who gets paid first.
It’s broadly:
* The banks : loans are cheap vs. others forms of financing, but they get paid first.
* Tax Agencies / Employee wages
* Other Creditors
* If there’s any money left, then it goes to shareholders.
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