Limited liability: Difference between revisions
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imported>Doug Williamson m (Spacing 22/8/13) |
imported>John Grout (Small expansion and inclusion of "unlimited liability" for indexing purposes) |
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The restriction of an investor's potential losses to the amount invested. | The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a companies debts. | ||
The option of limited liability is one of the important advantages of incorporation. | |||
Less commonly in the commercial context, a company member's liability may alternatively be limited to an amount guaranteed by the member. | Less commonly in the commercial context, but often used for social or public interest bodies, a company member's liability may alternatively be limited to an amount guaranteed by the member. | ||
Revision as of 18:25, 22 June 2014
The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a companies debts.
The option of limited liability is one of the important advantages of incorporation.
Less commonly in the commercial context, but often used for social or public interest bodies, a company member's liability may alternatively be limited to an amount guaranteed by the member.
