What is meant by 'limited liability' for a company?

Extending the liability to personal assets of shareholders

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Restricting the obligations to company's assets

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Either A or B

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Neither A nor B

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Solution

The correct option is B
Restricting the obligations to company's assets

Limited liability means if a company goes into financial distress, then the personal assets of shareholders will not be at stake and the liability is limited to the company's assets.

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The liability of the shareholders of a company is always limited to the ____________ of the share they have subscribed.

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