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Limited Liability

Limited liability is a legal concept that protects business owners from being personally responsible for the company's debts. If a business with limited liability faces financial troubles, creditors can only claim the assets of the business, not the personal assets of the owners, such as their homes or savings. This protection encourages entrepreneurship by allowing individuals to invest in a business without the fear of losing their personal wealth. Common forms of limited liability include corporations and limited liability companies (LLCs).

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    Limited liability is a legal concept that protects business owners from being personally responsible for their company’s debts and liabilities. This means that if a business fails or faces financial trouble, the owners’ personal assets—like their homes or savings—are generally safe from creditors. Instead, only the money invested in the company is at risk. This structure encourages entrepreneurship by allowing individuals to take risks without the fear of losing more than they initially invested, fostering innovation and economic growth while safeguarding personal finances.