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This allowed traders to limit their legal responsibility within the celebration of business enterprise failure to the amount they invested in the business – shareholders have been nonetheless liable directly to creditors, but only for the unpaid part of their shares. (The theory that shareholders are liable on the corporation had been launched while in the Joint Stock Organizations Act 1844).
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From the late 18th century, Stewart Kyd, the author of the first treatise on corporate law in English, outlined a company as:
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Importantly, businesses supply their owners limited legal responsibility security. Their shareholders profit by means of dividends and stock appreciation, but they don't seem to be personally responsible for the business's legal or financial liabilities.
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