ENTREPRENEURSHIP

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INTRODUCTION TO ENTREPRENEURSHIP

DEFINITION OF ENTREPRENEURSHIP

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In a partnership, financial liability of members of the company is limited to the amount of shares being held or subscribed by the members.
A
TRUE
B
FALSE
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -Limited liability means that if the partnership fails, then creditors cannot go after a partner’s personal assets or income. LLPs are common in professional businesses like law firms, accounting firms, medical practices, and wealth managers.

Detailed explanation-2: -The liability of shareholders of a company is limited to the issue price of the shares they have subscribed to i.e. a company is a limited liability entity.

Detailed explanation-3: -As per the Partnership Act 1932, the liability of the partners in a partnership firm is unlimited.

Detailed explanation-4: -The term ‘limited liability means that the responsibility of the members or shareholders of a company for its debts and obligations is restricted to a specific amount or to the amount of their investment in the company.

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