When a corporation fails, the maximum that can be lost by an investor protected by limited liability is:

Question

Quizplus · Accepted Answer

Limited liability means that the investor's potential losses are limited to the amount of their initial investment. They are not liable for any additional debts or expenses incurred by the failing corporation. Therefore, option A is correct.  The investor is not liable for the profit made by the corporation. Option B is incorrect. Similarly, the investor is not liable for the corporation's debts beyond their initial investment, so option C is incorrect. Lastly, the investor's personal wealth is unrelated to their investment, so option D is incorrect.

When a Corporation Fails, the Maximum That Can Be Lost