Which one of the following categories of owners enjoys limited liability?
A) General partners in a limited partnership or limited liability company.
B) Shareholders (common stock) of a corporation
C) Sole proprietors
D) Both A and B

Question

Quizplus · Accepted Answer

Shareholders (common stock) of a corporation enjoy limited liability, meaning their personal assets are not at risk in the event of the corporation's financial obligations or lawsuits. General partners in a limited partnership or limited liability company may also enjoy limited liability, but it is not a guarantee and depends on the specific terms outlined in the partnership agreement or operating agreement. Sole proprietors do not have limited liability and are personally responsible for all financial obligations and lawsuits related to their business. Therefore, choices A and C are incorrect.

Which One of the Following Categories of Owners Enjoys Limited