limited liability

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limited liability

n. 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)

References in periodicals archive ?
acknowledges that joint and several unlimited liability might create
Mueller does not differentiate the unlimited liability firms from limited liability ones and includes these unlimited liability firms in her main analysis.
I use the generalized dummy variable technique developed by Gujarati (1970a, 1970b) to examine whether DIV has a different effect on leverage in firms with limited liability than in firms with unlimited liability. The modified model is:
Nonetheless, as Evans and Quigley (1995) argue, broader liability structures, including unlimited liability, have the potential to overcome information asymmetries between creditors and shareholders.
To Kevin Berry, a veteran from the Afghanistan war and a sufferer of post-traumatic stress disorder (PTSD), unlimited liability is not negotiable.
(66) Industry has long argued that the marine insurance industry is incapable of providing sufficient insurance coverage to cover unlimited liability and that unlimited liability would thus become the financial ruin of the maritime shipping industry.
However the fundamental issue of capping individuals' overall care costs so they are not left with potentially unlimited liability cannot be tackled by Wales in isolation.
In the event, the eight justices of the court decided there must be no unlimited liability for German funds.
Auriga Gold Corporation (TSX-V: AIA), a Canadian mine development and exploration company, has completed the acquisition of the Prosperity North Project in the Clinton Mining Division of British Columbia from Pioneer Metals Unlimited Liability Company, a subsidiary of Barrick Gold Corporation.
Stephen McNamara of Ryanair said: "Ryanair notes that the Advocate General's Opinion is not binding on the Court and we hope the final Court decision will find in favour of Ryanair's appeal and remove the blatant discrimination in the EU261 airline regulations, which expose airlines to unlimited liability."
The document would also provide for unlimited liability in the case of environmental damage and the obligation to cover 100% of the cost of eliminating it.
Uncertainty over the likely cost of compensation as well as the prospect of unlimited liability for Tokyo Electric, commonly known as Tepco, has unnerved investors since the crisis, triggered a widening of corporate bond spreads.

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