unlimited company (Q3414)

company where shareholders/members have unlimited legal liability. Unlimited companies are those types of company that do not have any limit on the liability of its members. The liability of each of the members extends to the whole amount of the company’s debts and liabilities. Therefore, the creditors of an unlimited company have the ability to enforce the debt and liability of the company on the shareholders, if wound-up. Despite NOT giving the shareholders limited liability protection, an unlimited company is still considered to be a separate legal entity. Therefore, the members of an unlimited company cannot be sued individually.