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Assume a company with limited liability has one owner who controls the firm. Assume that the firm borrowed $ 1 0 , 0 0 0
Assume a company with limited liability has one owner who controls the firm. Assume that the firm borrowed $ but now only has $ in assets as a result of a market down turn. It is now time to repay the loan. The creditor wants to be repaid $ plus interest. Can the creditor recover the remaining amount over and above the $ the firm has due directly from the firms owner?
Yes the creditor can recover the amount due on the loan from the shareholder.
No the creditor cannot recover the amount due on the loan from the shareholder.
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