Business Law Glossary: L

Legal Tender: All money issued by the government.

Libel: A libel case consists of published material with the following criteria: (1) The material is defamatory; (2) the written statements are about someone who is identifiable and living; (3) the material is distributed to someone other than the victim. A key in a libel case is that the victim's reputation must suffer as a result of these written words in order for the action to be actionable.

Limited Liability: The maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment.

Limited Liability Company: A new and flexible business organization that offers the advantages of liability protection with the simplicity of a partnership.

Limited Partnership: A special type of partnership which is very common when people need funding for a business, or when they are putting together an investment in a real estate development.

Liquidate: To sell the assets of a business, paying bills and dividing the remainder among shareholders, partners or other investors.

Liquidation Preference: Certain classes of stock (usually preferred stock) may have a liquidation preference, which entitles the holders to be paid first in the event of the liquidation of a corporation's assets.

Loss of Consortium: Damages awarded to a family member (usually a spouse) for loss of companionship.