Which form of business organisation normally provides limited liability to its shareholders?
Correct answer: C. Limited company
- A. Sole proprietorship
- B. Ordinary partnership
- C. Limited company
- D. Unregistered joint venture
Explanation
In a limited company, shareholders usually risk only the amount unpaid on their shares or the amount they have agreed to contribute. Sole proprietors and ordinary partners generally have broader personal liability.
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About Nature and Forms of Business Organisation
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
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