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Simple English definitions for legal terms

limited personal liability

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A quick definition of limited personal liability:

Term: Limited personal liability

Definition: Limited personal liability means that if someone invests in a business or is part of a legal relationship like a corporation or partnership, they usually can't be held responsible for any problems or debts the business has. They might only lose the money they invested. For example, if someone buys stock in a company and the company goes bankrupt, the stockholder might lose their money, but they won't have to pay any extra money to cover the company's debts. However, there are some exceptions to this rule, like if the investor did something wrong or illegal.

A more thorough explanation:

Definition: Limited personal liability refers to a legal concept where an individual or investor is not held responsible for the liabilities or damages of a business, except in certain circumstances. This term applies to various legal relationships such as corporations, partnerships, limited liability corporations (LLCs), or trusts. In such cases, a person with limited personal liability cannot be sued personally to cover any liabilities, and they may only lose the amount invested in the entity.

For example, if you own stocks in a corporation, you cannot be held liable for anything except for the potential loss in the price of your shares. Similarly, if you invest in an LLC, you may be held personally liable for debts only if you participated in some form of deception.

However, there are exceptions to limited personal liability that vary depending on the legal relationship. For instance, settlors of a trust may be reached by creditors in some circumstances if fraud is involved.

Examples:

  • John invests $10,000 in a corporation. The corporation goes bankrupt, and John loses his investment. However, he is not held personally responsible for any of the corporation's debts or liabilities.
  • Sarah is a member of an LLC. The LLC takes out a loan, but it cannot repay the debt. Sarah is not held personally responsible for the debt because she did not participate in any fraudulent activities.
  • Mike creates a trust and transfers his assets to it. Later, he is sued for fraud, and the court orders him to pay damages. The court can reach the assets in the trust to satisfy the judgment because Mike was involved in fraudulent activities.

The examples illustrate that limited personal liability protects investors and individuals from being held responsible for the debts and liabilities of a business or entity, except in certain circumstances. In the first example, John is not held responsible for the corporation's debts because he is a stockholder. In the second example, Sarah is not held responsible for the LLC's debt because she did not participate in any fraudulent activities. In the third example, Mike is held responsible for the trust's assets because he was involved in fraudulent activities.

limited partnership | limited power of attorney

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chag!!! hope you’re happily enjoying your summer before you kill it at UT
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i get compared to summer all the time tbh
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comes with the territory of being a girl with big eyes and art hoe tastes
I'm done trying to get into law school. Just going to go play dead in some grass somewhere. Good luck all.
KnowledgeableRitzyWasp
17:10
noo battle brother
KnowledgeableRitzyWasp
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don’t surrender
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@babybunny: yeah... I learned that after my last heartbreak which culminated in my lung randomly collapsing
Plant my feet and bitterly breathe up the time that's passing
anyone have advice on submitting an additional rec letter after WL even if the admissions officer said it's not necessary? rec letter is from someone affiliated with the school..
I would still do it
18:01
not someone claiming they got accepted from the SMU WL
One of my waitlist allowed me to submit a fifth letter of rec after submitting 4 in my initial applicstion
18:03
I just hope SMU gives me a chance once my test results post :’)
If it’s another prof, I would ask the law school if it’s okay if the new recommender submitted another letter directly to admissions team, if they say yes definitely go for it
18:05
I only have one LOCI for them left and I’m waiting to use it when my last results release, otherwise I would
manifestmoreadmissions
21:02
valley SMU would be so lucky to have you you would be such an asset
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