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

Property records show that the unit is still registered to the limited liability company that Jackman and Furness used when they purchased the home in 2008.

From MarketWatch • Apr. 6, 2026

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

Susan suggests they consider reorganizing the farm as a limited liability company.

From The Wall Street Journal • Feb. 15, 2026

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

From Barron's • Jan. 8, 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