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

Setting up your business as a limited liability company or an S corporation can allow you to pay yourself via payroll and can make it easier to separate business and personal expenses.

From New York Times

Prosecutors did not identify the limited liability company but said that it was not legally a super PAC.

From Seattle Times

The settlement also resolves claims against two limited liability corporations that owned the properties, along with Bruno, where the alleged harassment occurred from at least 2011 through 2016.

From Seattle Times

The latter includes single member limited liability corporations.

From Seattle Times

Pacaso sets up a limited liability corporation to buy a property, then divides the LLC into eight ownership shares that it sells on its website.

From Los Angeles Times