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

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Example Sentences

See Examples For:

limited liability

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

Property records show it was sold by a limited liability company called Faith 5 and bought by a limited liability company called Dlareme — “emerald” backward.

From Los Angeles Times ● Jun. 24, 2026

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

To that end, he set up a limited liability company.

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

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