Which of the Following Statements Is True About Limited Liability

question 42

Multiple Choice

Which of the following statements is true about limited liability?

• A)It is any type of investment where the investor's maximum possible losses 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)With limited liability,every partner in the partnership is jointly and severally liable for the partnership's debts and obligations.

---

Definitions:

Domestic Quantity

Refers to the total amount of a good or service produced within a country's borders, irrespective of the production entity's nationality.

Demanded

Describes the quantity of a good or service that consumers are willing and able to purchase at a given price at a specific time.

U.S. Tariff

Taxes imposed by the United States on imported goods to protect domestic industries and generate revenue.

Steel

A hard, strong alloy made primarily of iron and carbon, used extensively in construction and manufacturing.