GROWTH DEVELOPMENT CHILD
DEVELOPMENT AND LEARNING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Incorporated business
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Unincorporated business
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Limited Liability business
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Unlimited liability business
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Detailed explanation-1: -The shareholders are not liable for the company’s debts once the shares they hold have been paid for in full.
Detailed explanation-2: -Because of limited liability, a company is classed as its own legal entity, so ultimately, it is responsible for any debts accrued. However, there are some circumstances where directors and shareholders can also be held liable for the company’s debts.
Detailed explanation-3: -Many states allow a business form called the limited liability company (LLC). The LLC arose from business owners’ desire to adopt a business structure permitting them to operate like a traditional partnership.
Detailed explanation-4: -In a limited liability company, owners (called members rather than shareholders) are not personally liable for debts of the company, and its earnings are taxed only once, at the personal level (thereby eliminating double taxation).