limited liability
limited liability
limited liability
| Noun | 1. | limited liability - the liability of a firm's owners for no more than the capital they have invested in the firm |
| 单词 | limited liability | |||
| 释义 | limited liabilitylimited liabilitylimited liability
limited liabilitylimited liabilityn. the maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment, and a limited partner can only lose his/her investment, but a general partner can be responsible for all the debts of the partnership. Parties to a contract can limit the amount each might owe the other, but cannot contract away the rights of a third party to make a claim. (See: corporation, shareholder, limited partnership, partnership, liquidated damages) limited liabilityLimited liabilityLimited Liabilitylimited liabilitylimited liabilityan arrangement that limits the maximum LOSS which a sHAREHOLDER is liable for in the event of company failure to the SHARE CAPITAL which he originally subscribed.The principle of limited liability limits a shareholder's maximum loss in the event of his company failing to the original share capital which he invested, no further claims by creditors against the shareholder's other assets being permitted. Once shareholders were protected in this way many more people were encouraged to invest in companies and JOINT-STOCK COMPANIES grew rapidly. To warn potential creditors that any claims by creditors will be limited in total to the amount of the company's share capital, such companies carry the term: ‘Limited’ (Ltd) or ‘Public Limited Company’ (Plc) after their names. When a business is subject to unlimited liability, as is the case with SOLE PROPRIETORS and unlimited PARTNERSHIPS, the owners of the business are liable in full for the debts of the business if it fails. This may involve their losing not only the capital that they have put into the business, but also most of their personal assets. When the directors of a joint-stock company continue trading after they should have known the company was insolvent (see INSOLVENCY), they can lose the protection of limited liability and become personally responsible for the firm's debts. limited liabilitya liability that limits the maximum LOSS that a SHAREHOLDER is liable for in the event of company failure to the SHARE CAPITAL that he or she originally subscribed.The principle of limited liability limits a shareholder's maximum loss in the event of a company failing to the original share capital that he or she invested, no further claims by creditors against the shareholder's other assets being permitted. In protecting shareholders in this way, many more people were encouraged to invest in companies, and JOINT-STOCK COMPANIES grew rapidly To warn potential creditors that any claims by creditors will be limited in total to the amount of the company's share capital, such companies carry the term ‘Limited’ (Ltd) or ‘Public Limited Company’ (plc) after their names. When a business is subject to unlimited liability, as is the case with sole proprietors, unlimited partnerships and unlimited companies, then the owners of the business are liable in full for the debts of the business if it fails. This may involve them losing not only the capital that they have put into the business but also most of their personal assets. limited liability
Words related to limited liability
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