LIMITED LIABILITY

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Definitions

limited liability means that the amount of liability is limited to a set amount. A corporation is a business structure which offers its owners or shareholders limited liability. If claims are made against a corporation, a shareholder or owner in it is only liable for the amount of money he has invested in the corporation. Claims cannot be made against a shareholder's personal or private holdings outside the corporation unless criminal activity has occurred in connection with the running of the corporation and can be proven. Otherwise his liabilities are limited to the amount of his investment.