Question 26
Business OrganisationsIn the event of a limited liability company going into liquidation each
- A.shareholder may lose the maximum of the amount he has invested
- B.shareholder loses nothing
- C.shareholder loses everything including his house
- D.shareholder's liability becomes unlimited
- E.shareholder will lose the amount he has invested plus a proportion of his bank account.
Show the answer and explanation
Answer: A (shareholder may lose the maximum of the amount he has invested)
Explanation
Limited liability means a shareholder can lose at most the money put into the shares; private property is safe.