Which of the following is an advantage of a limited liability company compared to a partnership?
A) Unlike a partnership, the members of a limited liability company cannot participate actively in management of the business.
B) Unlike a partnership, the members of a limited liability company are not personally liable for the business's debts.
C) Unlike a partnership, the members of a limited liability company are taxed at the business level and are double-taxed.
D) Unlike a partnership, the members of a limited liability company do not need to file articles of organization with the state.

Question

Quizplus · Accepted Answer

A limited liability company provides its members with limited liability, meaning that their personal assets are protected from any business debts or liabilities. In a partnership, each partner is personally liable for the business's debts, which can put their personal assets at risk. Thus, limited liability is an advantage of a limited liability company compared to a partnership. Choices A, C, and D are incorrect as they either do not reflect the advantages of a limited liability company or are simply untrue.

Which of the Following Is an Advantage of a Limited