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- DictionaryLimited liability
noun
- 1. the condition by which shareholders are legally responsible for the debts of a company only to the extent of the nominal value of their shares. British
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Limited liability is a business law principle that shields individual shareholders from liability for debts owed by a business entity to the extent of the shareholder’s investment in the entity. As a result, an investor’s personal property is protected from any debt taken on by the business entity or judgment against the business.
limited liability, condition under which the losses that owners (shareholders) of a business firm may incur are limited to the amount of capital invested by them in the business and do not extend to their personal assets.
The meaning of LIMITED LIABILITY is liability (as of a stockholder or shipowner) limited by statute or treaty.
Limited liability is a legal status in which a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company or joint venture. If a company that provides limited liability to its investors is sued, then the claimants are generally entitled to collect only against the assets of ...
noun [ U ] LAW uk us. Add to word list. a situation in which the owners or other shareholders of a company are not responsible for all of its debts if the company fails: The bank can rely on limited liability to protect employees and shareholders from lawsuits. Compare. unlimited liability.
a situation in which the owners or other shareholders of a company (= people who own shares in it) are not responsible for all of its debts if the company fails: Under limited liability, shareholders can buy and sell shares without the approval of other owners. It is the nature of limited liability businesses to create conflicts of interest.
Oct 1, 2019 · Written By. InvestingAnswers Expert. Updated October 1, 2019. What is Limited Liability? Limited liability is limited exposure to financial risk by investors of a company or a partnership. This exposure is usually limited to the individual's investment. How Does Limited Liability Work?
