Which of the following statements is true about limited liability? a It is any t
ID: 1199704 • Letter: W
Question
Which of the following statements is true about limited liability?
a
It is any type of investment where the investor’s maximum possible loss is the amount invested.
b
It is full liability for the debt and other obligations of a legal entity.
c
It is an undesirable situation where, if the debts of the business exceed its ability to pay, creditors may reach the personal assets of the business owners.
d
With limited liability, all it takes is one successful personal injury lawsuit, not covered by insurance, to destroy years of hard work by an individual business owner.
e
It is the liability of the owner of a business for all the obligations of the business.
a
It is any type of investment where the investor’s maximum possible loss is the amount invested.
b
It is full liability for the debt and other obligations of a legal entity.
c
It is an undesirable situation where, if the debts of the business exceed its ability to pay, creditors may reach the personal assets of the business owners.
d
With limited liability, all it takes is one successful personal injury lawsuit, not covered by insurance, to destroy years of hard work by an individual business owner.
e
It is the liability of the owner of a business for all the obligations of the business.
Explanation / Answer
Ans:
a) It is any type of investment where the investor’s maximum possible loss is the amount invested.
The limited liability of an owner or a partner of a company for no more capital than they have invested.
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