Eli5: why the shareholders in a company are not liable to pay debts owed by the company?
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It’s the rules (law) and it is intended to encourage businesses to form.
The first principle of a fair rule, is that it should be known ahead of time. Anyone lending or contracting with a company knows ahead of time who is liable. So at the top level it is fair to allow a company structure to limit liability to only what has been put in.
But also for many small companies, the shareholders are actually liable for their debts, when they’ve agreed to it. For instance, banks sometimes make small business loans that require the principal to separately guarantee the loan. This is known and agreed upon beforehand, and makes it possible to access bigger loans than the bank would otherwise be comfortable with.
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