Limited Liability Act

Historical Context Note

Litencyc Editors (Independent Scholar - Europe)

The Literary Encyclopedia. Volume 1.2.1.07: English Writing and Culture of the Victorian Period, 1837-1901.
Vol. editors: Gillian Fenwick (University of Toronto), Jessica Gossling (Goldsmiths College, University of London)

Domains

Legislation (Bills, Acts, Laws ...)

Dates

Date of occurrence 1862

Places

United Kingdom (Location)

Resources

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The terms of the 1855 Limited Liability Act allowed the shareholders of companies more than 25 strong to be liable only for an amount equal to the value of their investment. This protected them against potential plaintiffs: if the company was sued, the plaintiffs would be suing the company itself, rather than the investors. This encouraged people without huge fortunes to invest in companies, without fear of risking bankruptcy. An 1862 Companies Act extended this policy to include insurance companies, which had not been included under the 1855 Act.

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85 words

Citation: Editors, Litencyc. "Limited Liability Act". The Literary Encyclopedia. First published 30 August 2013 [https://www.litencyc.com/php/stopics.php?rec=true&UID=2052, accessed 06 May 2024.]

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