Limited liability: Difference between revisions
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imported>John Grout (Small expansion and inclusion of "unlimited liability" for indexing purposes) |
imported>Doug Williamson m (Correct typo to make company singular.) |
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The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a | The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a company's debts. | ||
The option of limited liability is one of the important advantages of incorporation. | The option of limited liability is one of the important advantages of incorporation. | ||
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* [[Limited company]] | * [[Limited company]] | ||
[[Category: | [[Category:Corporate_finance]] | ||
[[Category: | [[Category:Compliance_and_audit]] | ||
Revision as of 07:35, 23 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 company's 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.
