The limited liability company is at its core a creation intended to protect the investors in a business from being unfairly deprived of the profits from their investment by providing a barrier between them and the creditors. Because the creditors might otherwise get a bad deal, there are strict laws as to how a company must be run. Directors who misbehave can face financial meltdown and even prison.
Despite this, most people start their own companies or become directors of existing companies without any clear idea of the risks and responsibilities involved. Who, for example, is going to decide what happens when the only two shareholder-directors of a successful business disagree about what they should do next?
Sorting out the problems that arise when close friends who went into business with each other realise they can't trust each other any more can be a very lengthy and expensive process.
