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Shareholder Liabilities

As the owners of a limited liability entity, shareholders are generally shielded from personal liability for claims against the corporation. Thus, if a corporation incurs a debt or obligation against it, creditors cannot recover the personal assets of the shareholders. However, the average life of a corporation in the United States is only seven years, and more than half fail before seven years have elapsed. A shareholder can lose his or her entire investment if the corporation fails.

Inside Shareholder Liabilities