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.

---

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

---

limited liability Cultural  

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

---

Discover More

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

See Examples For:

limited liability

Rather than a conventional nonprofit, the fund will be a company-owned limited liability corporation, a setup that Anthropic says allows different kinds of giving.

From Los Angeles Times ● Oct. 20, 2026

It can extend cheap loans, tax credits and whatever else it likes, even in exchange for giving up limited liability.

From The Wall Street Journal ● Sep. 30, 2026

National banks didn’t have limited liability until the rise of deposit insurance in the 1930s.

From The Wall Street Journal ● Sep. 30, 2026

The mansion is currently registered to a limited liability company.

From MarketWatch ● Aug. 17, 2026

Most millionaires sincerely believe in the existence of money and limited liability companies.

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

Random Word

Spin the wheel and learn a new word!

---