A shareholder's ________ liability means that they are liable for the debts and obligations of the corporation only to the extent of their capital contribution.

Question

Quizplus · Accepted Answer

Limited liability is a key feature of a corporation, which means that shareholders are only responsible for the debts and obligations of the corporation up to the amount of their investment or capital contribution. This protects shareholders from personal financial liability and is one of the main reasons why corporations are a popular legal structure for businesses. The other options are not applicable to this concept.

A Shareholder's ________ Liability Means That They Are Liable for the Debts