unlimited liability

Unlimited liability

Full liability for the debt and other obligations of a legal entity. The general partners of a partnership have unlimited liability.

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unlimited liability

The liability of the owner of a business for all the obligations of the business. An owner's personal assets can be seized if the business's assets are insufficient to satisfy claims against it. The placement of personal assets at risk is a great disadvantage of proprietorships and general partnerships. The ability to limit the amount of liability to which an owner is subject is a major reason for the formation of corporations and limited partnerships. Compare limited liability.