Definitions for limited liability
lim·it·ed li·a·bil·i·ty

Princeton's WordNetRate this definition:0.0 / 0 votes

1. limited liabilitynoun

   the liability of a firm's owners for no more than the capital they have invested in the firm

WiktionaryRate this definition:5.0 / 1 vote

1. limited liabilitynoun

   The liability of an owner or a partner of a company for no more capital than they have invested.

WikipediaRate this definition:0.0 / 0 votes

1. Limited liability

   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 partnership. 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 the company, not the assets of its shareholders or other investors. A shareholder in a corporation or limited liability company is not personally liable for any of the debts of the company, other than for the amount already invested in the company and for any unpaid amount on the shares in the company, if any, except under special and rare circumstances permitting "piercing the corporate veil." The same is true for the members of a limited liability partnership and the limited partners in a limited partnership. By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business (unlimited liability). Although a shareholder's liability for the company's actions is limited, the shareholders may still be liable for their own acts. For example, the directors of small companies (who are frequently also shareholders) are often required to give personal guarantees of the company's debts to those lending to the company. They will then be liable for those debts that the company cannot pay, although the other shareholders will not be so liable. This is known as co-signing. A shareholder who is also an employee of the corporation may be personally liable for actions the employee takes in that capacity on behalf of the corporation, in particular torts committed within the scope of employment. Limited liability for shareholders for contracts entered by the corporation is not controversial because this could and probably would be agreed to by both parties to the contract. However, limited liability for shareholders for torts (or harms not agreed to in advance) is controversial because of concerns that such limited liability could lead to excessive risk taking by companies and more negative externalities (i.e., more harm to third parties) than would be produced in the absence of limited liability. According to one estimate, negative corporate externalities on an annual basis are equal to between 5 and 20 percent of U.S. GDP.An issue in liability exposure is whether the assets of a parent entity and the sole owner need to be subject to the subsidiary’s liabilities, when the subsidiary is declared insolvent and owes debt to its creditors. As a general principle of corporate law, in the United States, a parent entity and the sole owner are not liable for the acts of its subsidiaries. However, as a caveat, they may be liable for its subsidiaries’ obligations when the law supports "piercing the corporate veil".Provided that the parent entity or the sole owner do not maintain separate legal identities from the subsidiary (through inadequate/ undocumented transfer of funds and assets), the judgment is likely to be in favor of the creditor. In the same regard, if a subsidiary is undercapitalized from its inception, that may be grounds for piercing the corporate veil. Further, if injustice/fraud to the creditor is proven, the parent entity or the owner may be held liable to compensate the creditor. Thus, there is not one characteristic that defines the piercing of a corporate veil - a factors test is used to determine if piercing is appropriate or not.If shares are issued "part-paid", then the shareholders are liable, when a claim is made against the capital of the company, to pay to the company the balance of the face or par value of the shares.

ChatGPTRate this definition:0.0 / 0 votes

1. limited liability

   Limited liability is a legal structure where a business owner or investor is protected from personal responsibility for the company's debts or liabilities. It means that if the business fails or incurs debts, the owners, shareholders, or investors can't be forced to use their personal assets to cover those debts. Their liability is limited to the amount they have invested in the company.

WikidataRate this definition:0.0 / 0 votes

1. Limited liability

   Limited liability is a concept whereby a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the value of their investment in that company. This usually takes the form of that person's dividends in the company being zero, since the company has no profits to allocate. The same is true for the members of a limited liability partnership and the limited partners in a limited partnership. By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business. Although a shareholder's liability for the company's actions is limited, the shareholder may still be liable for its own acts. For example, the directors of small companies are often required to give personal guarantees of the company's debts to those lending to the company. They will then be liable for those debts in the event that the company cannot pay, although the other shareholders will not be so liable. This is known as co-signing.

The Nuttall EncyclopediaRate this definition:0.0 / 0 votes

1. Limited Liability

   liability on the part of the shareholders of a joint-stock company limited by the amount of their shares.

Suggested ResourcesRate this definition:0.0 / 0 votes

1. limited liability

   Read the full text of the Limited Liability poem by William Schwenck Gilbert on the Poetry.com website.

Matched Categories

1. • Indebtedness

How to pronounce limited liability?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say limited liability in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of limited liability in Chaldean Numerology is: 3

2. Pythagorean Numerology

   The numerical value of limited liability in Pythagorean Numerology is: 9

Examples of limited liability in a Sentence

1. Leemon Baird:

   The members of the governing council are the actual owners of the company. They aren't just advisers. They are Hedera, hedera is an LLC (limited liability company) that is split 39 ways — 39 companies own it, control it, and make all the decision.

2. Scott Wagner:

   They are acting like they didn't know what was happening, (but) there isn't a damn thing the crew can do without the owners telling them what to do, nowadays the technology is so good these owners are on the bridge with the captain every step of the way. They are virtually on the ship, so for TOTE to file limited liability and say they didn't know what was happening, that is wrong.

3. Kurt Arnold:

   We're going to show that Tote knew the El Faro was a defective ship that they knowingly sent into the path of a hurricane. We'll be fighting to expose the Limited Liability act of 1851 as the backward and arcane law that it is.

4. Scott Wagner:

   Nowadays the technology is so good these owners are on the bridge with the captain every step of the way. They are virtually on the ship, so for TOTE to file limited liability and say they didn't know what was happening, that is wrong.

References

1. ^ Princeton's WordNet
   http://wordnetweb.princeton.edu/perl/webwn?s=limited liability
2. ^ Wiktionary
   https://en.wiktionary.org/wiki/Limited_Liability
3. ^ Wikipedia
   https://en.wikipedia.org/wiki/Limited_Liability
4. ^ ChatGPT
   https://chat.openai.com
5. ^ Wikidata
   https://www.wikidata.org/w/index.php?search=limited liability
6. ^ The Nuttall Encyclopedia
   https://www.gutenberg.org/cache/epub/12342/pg12342-images.html#LimitedLiability