Limited liability – n : legal term; a feature of the corporate (or corporation) form of organization under which corporate creditors can make claims only against corporate assets rather than the assets of the corporation’s owners, officers or directors. This feature is also shared with the LLC form of organization. Example: All startup companies would be wise to legally form their business (incorporate or form an LLC) so that the founders and owners can benefit from the limited liability provisions, shielding their personal assets from future potential business creditors or legal actions.

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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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