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EZ Pedia » Business » By Type » Limited Liability










Getting Limited Liability

Banks normally only grant limited liability to limited companies, franchises, and cooperatives. Banks view sole traders and partnerships as too risky to grant limited liability to.


Definition

If a business has limited liability, if they go bankrupt, they only pay the value of the business to the people they owe money to. The owners of the business would not need to pay their full debts with their own possessions if the value of the business does not cover their full debts.


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