Limited liability means:
A) the liability of shareholders for company debts is normally limited to the amount they have paid for their shares.
B) the liability of directors for company debts is limited.
C) if the company fails, the creditors may have to bear greater losses than if they were dealing with a non-company.
D) A and C

Question

Quizplus · Accepted Answer

Limited liability primarily means that shareholders are only responsible for the debts of the company up to the amount they invested (A), and it also implies that creditors might face higher losses if the company cannot pay its debts, as they cannot claim the personal assets of the shareholders (C). Directors' liability (B) can be limited under certain conditions, but it's not what is generally meant by "limited liability" in the context of company structure and shareholder investment.

Limited Liability Means