A liability company is a type of business structure in which the owners, or shareholders, have no personal responsibility for the debts and obligations of the company. This means that if the company faces financial difficulties or legal action, the shareholders' personal assets are not at risk. In contrast, in a partnership or sole proprietorship, the owner(s) are personally responsible for the business's debts and liabilities. Liability companies can take various forms such as corporations, limited liability companies (LLC), or limited partnerships.