Increasing litigation risk is one of the main drivers of the growth of organizational forms of business with limited liability characteristics.

Question

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Limited liability organizations, such as corporations or limited liability companies, protect the personal assets of shareholders or members from being used to satisfy the debts or legal obligations of the organization. This limited liability characteristic can be attractive to entrepreneurs and investors who face potential litigation risk in their business ventures. Therefore, the growth of organizational forms with limited liability characteristics can be attributed to the desire to minimize personal risk and increase protection against litigation.

Increasing Litigation Risk Is One of the Main Drivers of the Growth