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

Instead, the study tracked joint ventures and limited liability company investments that typically consist of stakes in private equity, venture capital, real estate and hedge funds.

From The Wall Street Journal • Jun. 8, 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

Imperial Valley Computer Manufacturing, a California-based limited liability company that started two years ago, plans to develop a 950,000-square-foot facility in the county that’s designed for advanced artificial intelligence and machine learning operations.

From Los Angeles Times • Mar. 23, 2026

The address listed for the LLC is the same as the one registered for another limited liability company tied to the purchase of a $42 million Lake Tahoe home in December.

From MarketWatch • Mar. 16, 2026

This is why people began collectively to imagine the existence of limited liability companies.

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