Limited liability may not be an advantage of the corporate form for owner-operated small businesses because:
A)a negligent worker can escape liability for his own acts.
B)lenders usually demand personal guarantees from the owners of small businesses.
C)stockholders participate in the business itself.
D)All of these are correct.

Question

Quizplus · Accepted Answer

Lenders usually demand personal guarantees from the owners of small businesses, which means that the owners are personally responsible for the debts of the business. Therefore, limited liability may not be considered an advantage for owner-operated small businesses as it does not protect the owners from personal liability. A and C are incorrect as they are not directly related to the limited liability advantage.

Limited Liability May Not Be an Advantage of the Corporate