Why Shareholders have limited liability Explain?

Shareholders have limited liability because their financial responsibility for a company's debts and obligations is restricted to the amount they invested in the company's shares. This legal structure protects personal assets, ensuring that shareholders are not personally liable for the company's financial failures beyond their investment. Limited liability encourages investment in corporations, as it reduces the financial risk for individuals. This framework is a fundamental principle of corporate law, promoting entrepreneurship and economic growth.