Question

If the company collapses under huge debts, what action will be taken against individual share holders ?​

Answer 1

Step-by-step explanation:

Section 22(1) of the Companies Act 71 of 2008 ("the Companies Act") makes provision for holding directors personally liable for the debts of their company, in circumstances where the business of the company has been carried on in a reckless or negligent manner

The good news is that in the majority of cases, the protection provided by private limited companies (LTDs), public limited companies (PLCs) and limited liability partnerships (LLPs), means that shareholders are not usually personally responsible for the debts of the company.