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

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

Once you strip out limited liability companies, which are often used by smaller investors, that share drops to 3.2% nationally.

From Barron's

Once you strip out limited liability companies, which are often used by smaller investors, that share drops to 3.2% nationally.

From Barron's

So far, of the 289 properties that have been sold, 168 were bought by limited liability investors and private equity firms, as opposed to 93 purchased by individuals, she said.

From Los Angeles Times

The couple are understood to have purchased the dwelling through an LLC, with the identity of the seller also hidden behind a limited liability company.

From MarketWatch