Question

Limited liability can best be defined as the legal provision that Group of answer choices

protects bond holders from being sued by other creditors.
reduces the exposure of sole proprietorships to law suits.
shields owners of a corporation from losing more than what they invested in a firm.
gives holders of preferred stock priority over holders of common stock.

Answer 1

Limited liability can best be defined as the legal provision that "shields owners of a corporation from losing more than what they invested in a firm".

Option: C

Step-by-step explanation:

Limited liability is basically where the monetary obligation of an individual is restricted to a fixed sum, most generally the amount of an investment of an individual in a business or partnership. If a limited liability corporation is sued then the plaintiffs sue the company, not its shareholders or investors.

Limited liability covers a proprietor so he or she can't lose more money than he or she has invested in a company. In other terms it refers to the amount of risk that an investor takes when investing in an organization.