GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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give you total control over the decisions
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allows you to keep all the profits to yourself
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gives you unlimited liability
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gives you limited liability
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Detailed explanation-1: -The members of the private limited company have limited liability. It means that if the company faces a loss, the personal assets of the members will not be used to pay the company’s debts.
Detailed explanation-2: -Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company’s debts is limited. In other words, the liability of the members of a company is limited only to the extent of the face value of shares taken up by them.
Detailed explanation-3: -The benefit of having a private limited company is that there is limited liability. However, shares can only be sold to shareholders in the business, which means that it can be difficult to liquidate such a company.
Detailed explanation-4: -Because an LLC is a separate entity, the owners of the company have limited liability. This is one of the most important benefits to operating as a limited liability company. Limited liability means that the individual assets of LLC members cannot be used to satisfy the LLC’s debts and obligations.
Detailed explanation-5: -Limited liability – as company owners are not legally obliged to pay outstanding company debts beyond the value of the shares they hold it protects the personal assets (such as a home or savings) of the company owners should a business fail.