Business Finance Glossary - L

Landfill

Landfill is disposing of solid waste into or onto land. A landfill tax applies to all waste disposed of at a licensed landfill site.

Lease

A contract by which an owner of a property conveys exclusive possession and use of it for a specified rent and for a specified period - after which the property reverts to the owner.

Liabilities

Liabilities are all the businesses' debts. The money which people owe to other parties.

Liability

A person or business deemed liable is subject to a legal obligation. A person/business who commits a wrong or breaks a contract or trust is said to be liable or responsible for it.

Limited Company

Company that is registered, has shareholders and a memorandum of agreement.

Limited liability

Usually refers to limited companies where the owners' liability to pay the debts of the company is limited to the value of their shares or the amount of their guarantee. It can also apply to contracts where a valid limitation clause has been included in the terms.

Liquid assets

These are assets such as shares in a company or unit trust, which can be sold quickly to give a cash amount.

Liquidation

Liquidation is the formal breaking up of a company or partnership by realising (selling or transferring to pay a debt) the assets of the business. This usually happens when the business is insolvent, but a solvent business can be liquidated if it no longer wishes to continue trading for whatever reason.

Liquidator

An insolvency practitioner appointed to realise the assets of a company in liquidation and make payments to secured, preferential and unsecured creditors in strict order of priority.