Tag: Topic 2

The most important benefit of running a business as a limited company is?

Select ONE answer:

1. There are several owners
2. The company has limited liability
3. The shareholders receive dividends
4. The shareholders benefit from limited liability

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Limited liability is a protection that benefits shareholders, not the company itself. It means that the shareholders are not personally responsible for the debts of the company. As a result, the most a shareholder can lose is the amount they spent on buying the shares.

This work is licensed under a Creative Commons Attribution 4.0 International License.