Limited Liability Legal Meaning and Definition

Here is a simplified definition of the legal term Limited Liability.

Limited Liability (noun):

"Limited liability" is a legal term that signifies the maximum amount a person can be held accountable for in case of business debts or obligations. Essentially, it caps the responsibility of investors or owners to the level of their investment in a company. For example, if a company goes bankrupt, shareholders of that company are only liable up to the amount of their unpaid shares. They are not personally responsible for the full debts of the company.