limited liability

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.

limited liability

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

limited liability

1. A fundamental feature of corporations, whereby investors are liable only up to the amount of their investment.

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.

Word History and Origins

Origin of limited liability¹

First recorded in 1850–55

Example Sentences

KL2 is a limited liability company that names Leonard — whose jersey number is 2 — as its manager.

From Los Angeles Times

Lang serves as president of Aerial Rapid Transit Technologies, the limited liability company behind the controversial proposed gondola system that would take baseball fans from Union Station to Dodger Stadium.

From Los Angeles Times

The identity of every single buyer isn’t clear, since many are obscured by trusts or limited liability companies, but real estate records and local sources suggest that developers are buying the lion’s share of lots.

From Los Angeles Times

A limited liability company, or LLC, has become a popular legal entity because it combines the limited liability of corporations with the flexibility and tax characteristics of sole proprietorships or partnerships.

From Salon

The home’s tax bills are sent to the limited liability company, in care of Garvey’s mother-in-law, to an address in La Quinta, Calif., property records show.

From Los Angeles Times