Select the alternative that better relates to limited liability in corporations.

Question

BlackTom AI · Accepted Answer

The task asks us to select the alternative that best relates to limited liability in corporations.

First, consider the concept itself: limited liability means that shareholders' personal assets are generally protected from the company’s debts and obligations; in most cases, shareholders are only at risk for the amount they invested in the company.

In the provided data, the stated option is: 'Shareholders are not responsible for their company's debts.' This statement directly expresses the core idea of limited liability by indicating that shareholders do not bear personal financial responsibility for corporate liabilities beyond their investment.

Now, since no other answer options are given in the 'answer_options' field, there is no alternative to compare against. In a typical multiple-choice setup, you would weigh other statements (for example, distinctions between sole proprietorships versus corporations, or clarifications about piercing the corporate veil under extreme circumstances) to determine which best aligns with limited liability.

Given the absence of additional choices, we can still evaluate the provided statement on its own: it captures the essential feature of limited liability in corporations—the protection of shareholders from personal liability for debts. The formulation emphasizes personal non-liability rather than, say, creditors' rights or potential exceptions.

If you later receive other alternatives, you would compare each option against the principle that shareholders are generally not personally liable, contrasting any claims that propose personal responsibility, unlimited liability, or exceptions (like corporate veil piercing) to identify the option that most accurately reflects limited liability in a typical corporate context.

COMM_V 298 101 102 103 2025W1 Class 1 and 2 Practice Quiz

Select the alternative that better relates to limited liability in corporations.

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