In both an LLP and Company the liabilities of partners and shareholders respectively are limited to the extent of their agreed capital as per agreement in LLP and up to the subscribed and unpaid share capital of the company. As it has a separate legal existence the members or partners are not personally liable for any debts incurred by company or LLP. But there are exceptions to the same which are as under.
- Liability in case of reduction of minimum members and partners
- Wrongful and fraudulent act
- Tax liability
- False statement
- Default in payment of share application money
- Outstanding liability not settled at the time of dissolution
For more details one can view our blog Director’s liability in a private limited company in India