limited liability

noun

1. a liability restricted by law or contract, as the liability of owners of shares in a corporation or limited company, or that of a special partner.

limited liability

noun

1. liability restricted to the unpaid portion (if any) of the par value of the shares of a limited company. It is a feature of share ownership

limited liability

1. A fundamental feature of corporations , whereby investors are liable only up to the amount of their investment .

Notes

This principle is important for failing corporations because it holds that only the assets of the corporation, not the personal assets of its owners, can be liquidated ( see liquidation ) to cover the corporation's debts.

Word History and Origins

Origin of limited liability¹

First recorded in 1850–55

Example Sentences

State lawmakers approved the formation of limited liability companies, now widely used across the country to help conceal the identities of owners and protect their assets from creditors.

From Washington Post

Sometimes the listed owner is really a limited liability company, and finding contact information for a relevant person can be challenging.

From Washington Post

The promise of limited liability is that it will structure markets to generate economic scale, which in turn can enable greater human flourishing.

From Fortune

The cornerstone of modern capitalism is limited liability, the legal notion that investors are responsible for losses of a corporation only to the extent of their own initial investments.

From Fortune

Eason recounted what he knew: that a limited-liability company was set up to buy a house where Jobs could recuperate.

From The Daily Beast

The next day, he started Soho Properties General Partner LLC as a foreign limited liability corporation.

From The Daily Beast

After all, what is Government but a limited liability company for the governing of the nation?

From Project Gutenberg

In 1880 the business was turned into a limited liability company.

From Project Gutenberg

The principle of limited liability having been once adopted by the legislature, justice required not only Register of members.

From Project Gutenberg

Partnerships with limited liability may be formed by two or more members.

From Project Gutenberg

The Company was formed into a limited liability company twenty-one years ago.

From Project Gutenberg