Limited Liability Refers to

question 71

Multiple Choice

Limited liability refers to

• A)whether the entity ceases to exist with a change in ownership.
• B)who manages the entity.
• C)whether the owners are risking any more than they invested in the firm.
• D)the ease with which ownership can be transferred.

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Definitions:

Tax Effects

The impact of tax laws on the financial performance of a company or the net income of an individual, including deductions, exemptions, and liabilities.

Stock Splits

An initiative taken by a company to multiply its current shares into more shares to augment the ease of trading those shares.

Owner's Equity

Owner's equity represents the owner's claim on the assets of a business after all liabilities have been deducted, indicating the net value owned by the proprietor in the company.

Regular Dividends

Payments made by a corporation to its shareholders out of its profits on a recurring basis.