What do you understand by limited liability?

Limited liability is a legal structure that protects an individual's personal assets from being used to satisfy the debts and obligations of a business. In this arrangement, the owners or shareholders are only liable for the amount they have invested in the company, meaning they cannot be held personally responsible for the company's financial failures. This concept encourages investment and entrepreneurship by reducing the financial risk to individuals. Limited liability is commonly associated with corporations and limited liability companies (LLCs).