limited liability

Definition

Type of investment in which a partner or investor cannot lose more than the amount invested. Thus, the investor or partner is not personally responsible for the debts and obligations of the company in the event that these are not fulfilled.

Use limited liability in a sentence

When my brother's company went under, he did not lose any additional money personally because he had structured the company so that there was limited liability.

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Since she had made a sizable capital investment, Anna was glad she had limited liability in her partner Stacy's bakery when the small business failed after the 2008 economic collapse.

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The limited liability nature of the partnership ensured that each person would be protected from losing their home or personal assets.

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general partnership liability