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Which of the following business forms include the limited liability protection of a corporation for its owners (except to the extent of their investment)?

a) Sole proprietorship
b) Partnership
c) Limited liability company (LLC)
d) Cooperative

User GatesReign
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2 Answers

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Final answer:

The business form that offers limited liability protection similar to a corporation is a Limited Liability Company (LLC). Owners of an LLC are protected from liability beyond their investment in the company.

Step-by-step explanation:

The business form that includes the limited liability protection of a corporation for its owners (except to the extent of their investment) is the Limited Liability Company (LLC). Unlike a sole proprietorship or a general partnership, where the owners are personally liable for the debts of the business, an LLC provides protection from liability to individual owners.

This means that the owners of an LLC would not risk losing their personal assets if the company were to fail, as the company is considered a separate legal entity. This model encourages entrepreneurs to take risks and seek investors without the fear of losing personal assets beyond their investment in the business.

User Jenson
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2 votes

Final answer:

A Limited Liability Company (LLC) is the business form that offers limited liability protection of a corporation for its owners, to the extent of their investment. Thus, the correct option is C.

Step-by-step explanation:

The business form that provides limited liability protection of a corporation to its owners, to the extent of their investment, is a Limited Liability Company (LLC). This means that if the business were to face bankruptcy or lawsuits, the personal assets of the owners (such as homes, cars, and personal bank accounts) are usually protected, and the financial risk is limited to the amount they have invested in the LLC.

Unlike a sole proprietorship or a general partnership, where the owners are fully liable for the business debts, an LLC offers an important layer of security which is similar to the protection shareholders have in a corporation.

An LLC combines the tax efficiencies and operational flexibility of a partnership with the liability protection of a corporation. Sole proprietorships and partnerships do not provide limited liability protection to their owners; they are personally responsible for all debts and liabilities of the business.

Cooperatives also typically involve shared ownership and decision-making, but the personal liability protection can vary depending on the cooperative's legal structure and the laws of the state in which it is organized, so they often do not provide the same level of protection as an LLC or a corporation.

User Junis
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