What is meant by unlimited liability?
A type of investment in which a partner or investor can lose an unlimited amount of money. Opposite of limited liability.
A type of business where owners share joint and several responsibilities for the entire amount of debt and other liabilities amassed by the business. Unlimited liability is not capped at a maximum amount and exists regardless of the amount of investment each owner has personally made. If the business is unable to meet any financial obligations or settle any outstanding liabilities, the owner’s personal assets can be seized to satisfy the debts. This is in contrast to a limited liability structure where owners’ losses cannot exceed the total amount invested in the business. Unlimited liability is found in general partnerships and sole proprietorships.