Final answer:
Stockholders' liability for losses only up to the amount they invest is called limited liability.
Step-by-step explanation:
Stockholders' liability for losses only up to the amount they invest is called limited liability.
When an individual purchases stock in a corporation, they become a shareholder and have a partial ownership claim on the company. However, their liability is limited to the amount they have invested in the corporation. This means that if the corporation incurs losses or goes bankrupt, shareholders are only at risk of losing the money they initially invested, and their personal assets are protected.