Legal Aspects of Management
Limited liability is a legal principle that protects the personal assets of an owner or shareholder from being used to satisfy the debts and obligations of a business. This means that if a corporation or limited liability company faces bankruptcy or lawsuits, the owners' financial risk is limited to the amount they invested in the business, shielding their personal property from claims. This concept is crucial for encouraging investment and entrepreneurship, as it reduces the financial risk associated with starting and running a business.
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