Unlimited liability company
1 definition found for this term.
Definitions are presented in the order source books were published (most recent first).
A company in which the shareholders are liable for the obligations of the company in some circumstances. Only a few provinces permit the incorporation of unlimited liability companies and the rules in the provinces that do are not the same. Under the Nova Scotia model, the shareholders are only liable to contribute to paying the company’s creditors where the corporation is being wound up and there are insufficient assets to pay off the creditors. Shareholders are not liable for obligations of the company on a day-to-day basis. Under Alberta law, shareholders are liable for any act, liability, or default on an ongoing basis. British Columbia follows the Nova Scotia model. Some provinces also permit some professionals like lawyers to form professional corporations that do not provide full limited liability. Though the rules vary from one province to the next, in general, shareholders remain liable for their own professional negligence.