Question

If a company has the word limited at the end of its name, this means that the _________.

• A. Shareholder's liability for the debts of the business is restricted
• B. Number of shareholders have fixed upper limit
• C. Number of members can never be increased
• D. There is a limit to the number of shares that can be issued

Answer 1

The correct option is A Shareholder's liability for the debts of the business is restricted

The limited liability of these companies means that the personal assets of members are not at risk when they investment the company. If the company experiences financial difficulties, its debts do not typically become the debts of the shareholders.