Definition of Limited Liability

The term-limited liability is normally used in partnership arrangements. You must have heard about the business naming ABC Limited Liability Partnership. This means that the persons or partners are not liable to pay for any liabilities associated with the partnership business. On the other hand, unlimited liability partnerships mean that a partners’ personal property will be used to recover the liabilities of a business.


In the case of a limited company, it means that the company’s liability is limited to the amount of total assets it owns. The business arrangements are now a day formed with limiting the liabilities that allows the organization to stay out of any trouble in case a business goes for liquidation.

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