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

Mitchell also owns, through a limited liability company, real estate used by the centers—meaning she could remain a landlord for her former business.

From The Wall Street Journal • Apr. 1, 2026

Bohm alleges that his parents used his cash from the four limited liability companies to pay their expenses.

From Los Angeles Times • Mar. 27, 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

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

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