Limited liability. At Common Law every person is liable, upon his contracts, up to the whole amount of his estate, and every partner is so liable upon all the contracts of the partnership. So extensive a liability being apt to prevent persons from engaging in business as partners, the statutes authorizing the construction of railways, etc., have always limited the liability of each shareholder to the amount of the shares held by him. Similar limitations, extending in some cases to double the amount of shares held, have also long been found (though not universally) in the charters of incorporated banks and insurance companies.
Companies Acts.--Under the Companies Acts, limited liability means that the members are not liable beyond the unpaid-up part (if any) of the nominal amount of the shares in respect of which they are registered in the books of the company. When a share has been fully paid up, no further liability exists. As to shares which have not been fully paid up, see CONTRIBUTORY, and see also JOINT STOCK BANKS, COMPANY, PROSPECTUS, ESTOPPEL, or other titles on company matters. The statutes relating to companies have been consolidated by the Companies Act, 1929 (19 & 20 Geo. 5, c. 23). Consult Palmer; Hemmant; Lindley on Company Law.
Shipowners, Canals, Docks, and Railways.--The liability of shipowners for loss or injury to goods or passengers carried in their ships is limited by s. 503 of the Merchant Shipping Act, 1894 (which section can be contracted out of, see Clark v. Dunraven, Lord, 1897 AC 59), re-enacting s. 54 of the (English) Merchant Shipping Act, 1862, and see the Pilotage Act, 1913 (2 & 3 Geo. 5, c. 31), s. 15, repealing s. 633 of the (English) Merchant Shipping Act, 1894 (exemptions under compulsory pilotage); that of dock and canal owners and harbour and conservancy authorities by the (English) Merchant Shipping (Liability of Shipowners and Others) Act, 1900 (63 & 64 Vict. c. 32); and that of common carriers (including railway companies by the (English) Carriers Act, 1830 (11 Geo. 4 & 1 Will. 4, c. 68), as amended by the (English) Railways Act, 1921 (11 & 12 Geo. 5, c. 55), as to goods of the value of 10l. or for railways, 25l.; and that of railway companies in respect of the carriage of certain animals, bys. 7 of the (English) Railway and Canal Traffic Act, 1854.
Air Navigation.--As to limitation of liability for certain damage caused by aircraft, see (English) Air Navigation Act, 1936 (26 Geo. 5 & 1 Edw. 8, c. 44), s. 15, the limits of liability for various forms, descriptions of aircraft are set out in the several schedules: airships 25,000l., balloons 500l., gliders 2,000l., and other aircraft according to weight, usually only half the limited amount to be payable in respect of loss of or damage to property. Air Navigation Act, 1936 (26 Geo. 5 & 1 Edw. 8, C. 44), s. 15.
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