Introduction

The financial crisis and the statute of small and medium enterprises in the UK have created an important debate on the position of the large-scale investors, especially towards the limited liability concept.
The economy climate is extremely tense after the debacle with the crisis that hit the world in 2008. Therefore, the consequences are noticeable in the way large-scale investors are pointed.
Limited liability companies are therefore criticized as being advantageous for the large-scale investors. However, it is important to notice that this critic is not founded since the origin of its implementation is actually the criticism.
We will thus see what exactly means the limited liability concept, then, the reasons why it is criticized and finally how this critic seems to be unfounded.

Limited Liability Company

What is a limited liability?

When limited liability is involved in a company, it clearly means that shareholders are not obliged to pay more than is due to purchase their shares even if the company cannot pays its debts. (DIANE)
For a very long time it was complicated for the shareholders not to be involved when a company wound up. According to Diane and Koutsias, the limited liability corporation is the greatest single discovery of modern times.

What is a limited liability company?

Limited liability companies are companies where the members’ liability is limited. Indeed, their contribution to the debts of the company is limited.
It exists two types of limited liability: by share and by guarantee.
If it is limited by shares, which is the most common form of company, the liability of each shareholder is limited to the amount individually invested (BOURNE). If it is limited by guarantee, which is commonly used for non-commercial purposes, the members guarantee the payment if certain amounts if the company goes into insolvent liquidation.

Before the Company Act 2006, it was possible for a company to be limited by