limited liability

American  

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.

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limited liability British  

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

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limited liability Cultural  

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

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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.

Etymology

Origin of limited liability

First recorded in 1850–55

Example Sentences

Imperial Valley Computer Manufacturing, a California-based limited liability company that started two years ago, wants to develop a 950,000-square-foot center in the county that’s designed for advanced artificial intelligence operations.

From Los Angeles Times • Mar. 27, 2026

The address listed for the LLC is the same as the one registered for another limited liability company tied to the purchase of a $42 million Lake Tahoe home in December.

From MarketWatch • Mar. 16, 2026

Moderna will appeal to a federal circuit court to argue that it has limited liability as a government contractor.

From Barron's • Mar. 4, 2026

Sullivan then sought to transfer the handful of private-equity funds he had bought for his own account into an LLC, or limited liability company.

From The Wall Street Journal • Jan. 16, 2026

This is why people began collectively to imagine the existence of limited liability companies.

From "Sapiens: A Brief History of Humankind" by Yuval Noah Harari