Question

limited liability means that
a. shareholders in a corporation must pay some but not all of the liabilities of the firm.
b. corporations have limited accountability for their debts and obligations.
c. corporations have only limited responsibility for their actions.
d. shareholders in a corporation cannot lose more than their investment in the firm.

Explanation:

Limited liability is a key concept in business. It protects shareholders. Shareholders' liability is restricted to their investment. If the corporation fails, they don't have to pay more than what they invested. Option A is wrong as shareholders don't pay firm's liabilities. Option B is incorrect as it's about shareholders' liability, not corporation's accountability. Option C is wrong as it's not about actions' responsibility in this context.

Answer:

D. shareholders in a corporation cannot lose more than their investment in the firm.