Can unlimited liability companies be listed on stock exchanges?
One day my lawyer told me to pay a big attention to the legal form of the company I invest.
Generally, there are limited and unlimited liability companies. In limited one, in case of bankruptcy I can lose 100% of my investment. In unlimited one it can be much more than 100% as responsibility is not limited.
I suppose that the things mentioned above are related to the investing to private companies only. I'm wondering if somebody have ever seen unlimited liabilities at the stock exchange where investor can lose much more than the price paid for the actions?
The stock is listed on an EU country stock exchange, not a US exchange.
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I'm wondering if somebody have ever seen unlimited liabilities at the stock exchange where investor can lose much more than the price paid for the actions?
Most countries / exchanges don't allow trading / listing on unlimited companies. So if you are trading in shares on stock markets, using cash/delivery to buying / selling shares, there is nothing to worry.
Most Banks also allow private equity placement into companies. If you invest by this route; you may invest in unlimited liabilities company that if things go for worse, loose you money.
On stock exchanges as pointed out by Peter; if you get into derivatives and options; there is no limit to loosing in some kinds of trades.
These are not limited to stock markets, but can also be for commodities and Fx markets where the stakes are quite high and trading in on margin.
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