Limited Liability

A situation in which a partner is not liable for more than his/her/its investment in case of insolvency. That is, limited liability means that the relevant partner would lose the value of his/her investment if the company declares bankruptcy, but would not be held liable for other outstanding debts. A limited liability company, where all partners and owners have limited liability, is one of the most common corporate structures in the United States. It is designated by the letters "LLC" after its name.