Limited liability

Limited liability,

Definition of Limited liability:

  1. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the amount of the investment in the company, even if it subsequently goes bankrupt and has remaining debt obligations.

  2. The legal protection available to the shareholders of privately and publicly owned corporations under which the financial liability of each shareholder for the companys debts and obligations is limited to the par value of his or her fully paid-up shares. The company itself, as a legal entity, is liable for the rest. Also called limited personal liability.

  3. Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company. In other words, investors' and owners' private assets are not at risk if the company fails. In Germany, it's known as aftungHeschränkter bit mesellschaft G.

  4. 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.

How to use Limited liability in a sentence?

  1. The new limited-liability laws made limited liability mandatory for all corporations.
  2. They were fortunate enough to have limited liability , which gave them some legal protection in areas that they really needed it in.
  3. You may want to strive to have limited liability so that if things go really wrong its not all your fault.
  4. You should try to make sure that you have limited liability any time you are doing something that may be very risky.

Meaning of Limited liability & Limited liability Definition