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WAEC Economics 2012 Question 20

Question 20

Business Organisations

An arrangement in which the debts of a company can only be paid from its own assets implies

  1. A.unlimited liability.
  2. B.transferred liability.
  3. C.limited liability.
  4. D.capital liability.
Show the answer and explanation

Answer: C (limited liability.)

Explanation

With limited liability shareholders' private property cannot be used to pay the company's debts.