Limited liability

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Revision as of 07:35, 23 June 2014 by imported>Doug Williamson (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 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.


See also