The idea of limited liability is the second most important characteristic of a Cyprus private company, the first one being the separate legal personality.
Limited liability refers to the liability of the shareholders towards the company.
This means that the liability of shareholder is limited up to the amount of his shares. Liability becomes relevant in the event of liquidation of the company. For example, if we have a company with 1000 shares of €1 each and one shareholder, in the case of liquidation that shareholder will only have to pay €1000 towards the debts of the company and that’s it. Of course the concept of limited liability is very important and it is one of the key factors that let to the success of the use of the company as a medium for carrying out commercial transactions.