The term "Limited Liability" is generally used to describe a situation in which a person is exempted in whole or in part from incurring a debt after taking an action that would have been required under prevailing law of the law system that pay money. The doctrine of limited liability in relation to company law is central to the principle that a company upon incorporation assumes a corporate personality independent of its members. This means that a new legal entity is created by law and consequently has its own assets, liabilities and rights, among other things, to enter into and be bound by its own contracts. In some respects, the name "Limited Liability Company" is very misunderstood. It is a common mistake to think that the company's liability for its various debts is limited and that the doctrine was created as a loophole through which the company can free itself from its contractual obligations. However, this is not the case since in the event of insolvency a company must liquidate all its assets to satisfy creditors' claims. If the value of these assets is insufficient, the company will appeal to the unpaid share capital of its members or the amount they have agreed to contribute to the company's assets in the event of dissolution. The liability of these partners is limited and not that of the company. There are also exceptional circumstances in which the courts will allow creditors to pierce the “corporate veil” by making it mandatory for shareholders to satisfy creditors' claims. For the shareholder, therefore, limited liability means participation in a company with limited risk. For the creditor, however, it means the real risk that in the event of bankruptcy he may remain unpaid for g...... middle of paper ......company and subsidiaries- The Corporate Veil [1991] Corporate Lawyer 12( 1) pp 16-17Ireland P (2010), “Limited assistance, shareholder Rights and the problem of corporate irresponsibility”,Cambridge journal of Economics, vol 34, pp837-856IbidHatfield was one of a long series of fatal rail accidents in which working practices and the safety situation on railway tracks were implicated. Blankenburg, S and Plesch, D (2007) “Corporate Rights and Responsibilities: Restoring Legal Responsibility” Retrieved February 12, 2012, from http://www.stwr.org/multinational-corporations/ corporate-rightsand-responsability-restoring-legal -accountability-htmlIreland P (2010), “Limited liability, shareholder rights and the problem of corporate irresponsibility”, Cambridge Journal of Economics, vol 34, pp837-856ibidibid