Limited Liability
/ˈlɪmɪtɪd laɪəˈbɪlɪti/
Definitions
- (n.) A legal principle limiting an owner's financial liability to the amount invested in a company or entity, protecting personal assets from business debts and claims.
The limited liability structure protects shareholders from losing personal assets if the company incurs debt.
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Commentary
Limited liability is fundamental in corporate and business law, often used to attract investment by minimizing investor risk; drafting should clearly specify extent and exceptions to the limitation.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.