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Question: “The doctrine of limited liability can best be understood as a matter of risk allocation. While it may appear that shareholders assume very little risk under the current model of limited liability, any attempt to alter the doctrine would be naïve at best and economically disastrous at worst.” Discuss.

Unit Code/Name
LAWD20037 Company Law
University of Bristol Law School

Answer: Over the years, people have sought to explore mechanisms to protect their own personal assets. Consequently, Company Law remains a favoured and common asset protection mechanism which serves to successfully externalise risk arising from businesses and other transactions. How such externalisation of risk is achieved is largely attributed to the legal nature of a corporation as being a distinct legal person capable of suing and being sued in its own name. This externalisation is achieved through the legal concept of limited liability, by which the members of the company would ordinarily not be personally liable for the debts or actions of the Company. Thus, the law creates a corporate veil between the Company on one hand and the persons who own and control it on the other. This legal doctri......(short extract)

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Details: - Mark: Not available | Course: Company Law | Year: 1st | Words: 1251 | References: Yes | Date written: December, 2017 | Date submitted: April 26, 2019 | Coursework ID: 1057

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