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

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Example Sentences

See Examples For:

limited liability

The billionaire venture capitalist and PayPal co-founder quietly bought the property through a limited liability company at a foreclosure auction in Pomona in July, according to the Wall Street Journal, which first reported the sale.

From Los Angeles Times ● Sep. 30, 2026

Had asbestos manufacturers announced in 1950 that their product might kill hundreds of thousands, no legislature would have said their owners should have limited liability.

From The Wall Street Journal ● Sep. 30, 2026

The mansion is currently registered to a limited liability company.

From MarketWatch ● Aug. 17, 2026

The company bought over 700 properties across the U.S. using limited liability companies and sold shares—or tokens—in those companies exclusively to foreign investors using cryptocurrency and blockchain technology.

From The Wall Street Journal ● Jul. 28, 2026

Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies?

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

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