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Entrepreneurship & Startups vocabulary · Legal Setup & Governance

Limited liability company

Meaning in entrepreneurship & startups, with examples

nounCommon term

In entrepreneurship & startups, limited liability company means: A type of company whose owners are not personally responsible for its debts beyond the money they put in, often shortened to LLC in the US.

In Turkish: limited şirket, sınırlı sorumlu şirket

How it is used

Limited liability is the key idea: if the company fails, the founders do not lose their homes. Names differ by country: LLC in the US, Ltd in the UK, GmbH in Germany. US startups planning to raise venture capital usually choose a C corporation instead of an LLC.

Example sentences

  1. We set up a limited liability company so that our personal savings were protected.

  2. Our lawyer explained that a limited liability company in the US is taxed differently from a corporation.

Common collocations

  • set up a limited liability company
  • limited liability
  • private limited company
  • LLC
  • incorporateTo officially register a business as a company, so that it becomes a separate legal person that can sign contracts, own assets and issue shares.
  • shareholders' agreementA contract between the owners of a company that sets out their rights and duties, such as voting, selling shares, board seats and investor protections.
  • board of directorsA group of people elected to oversee a company's management and make major decisions, such as approving budgets, fundraising, key hires and the sale of the company.
  • founders' agreementA written contract between co-founders that sets out who owns what, who does what, how decisions are made and what happens if someone leaves.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Legal Setup & Governance

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