What is a company's liability?

Answer 1

A limited liability company (LLC):

• is a type of business ownership combining several features of corporation and partnership structures
• is not a corporation or a partnership
• may be called a limited liability corporation, the correct terminology is limited liability company
• owners are called members not partners or shareholders
• number of members are unlimited and may be individuals, corporations, or other LLC's

A limited liability company is a corporate structure whereby the members cannot be held personally liable for the company's liabilities or debts. The laws that govern vary in different jurisdictions. It is similar to a corporation in some respects but not all. If you are interested in forming an LLC you should consult with an attorney who specializes in business law.

In general, limited liability is a type of liability that cannot exceed the amount that has been invested in a partnership or limited liability company. Limited liability protects personal assets from the risk of being seized to satisfy creditor's claims, debts and other obligations. For privately or publicly held corporations, a shareholder's responsibility for the company's debts is limited to the par value of paid up shares. The company itself as a legal entity is liable for the rest.