The concept of limited liability says a stockholder of a corporation:

Question

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Limited liability means that a stockholder's personal assets are not at risk if the corporation faces financial difficulty or bankruptcy. Therefore, the stockholder's maximum loss can only be the amount of his/her investment in the corporation. Option A is false because limited liability means a stockholder is not liable for the corporation's liabilities beyond the amount of their investment. Option B is false because dividends are a portion of the corporation's profits and have no direct relation to limited liability. Option D is false because limited liability does not exempt corporations from paying taxes owed.

The Concept of Limited Liability Says a Stockholder of a Corporation