Which of the following are features of a limited liability company? i.Separate legal entity ii....
Which of the following are features of a limited liability company?
i.Separate legal entity
ii. Right to sue but not be sued
iii. Has its own corporate name
iv. The liability of members is limited.
- A) i,ii and iii
- B) ii,iii and iv
- C) i,ii and jv
- D) i,iii and iv
Correct Answer: D) i,iii and iv
Explanation
This question is asking about the features of a limited liability company. A limited liability company is a type of business organization that offers limited liability protection to its owners, who are called members.The features of a limited liability company are as follows:
1. Separate legal entity: A limited liability company is considered a separate legal entity from its owners. This means that the company can enter into contracts, own property, and sue or be sued in its own name, separate from its members.
2. Right to sue but not be sued: This statement is not correct. A limited liability company has the right to sue and be sued, just like any other legal entity.
3. Has its own corporate name: A limited liability company has its own unique name, which is registered with the appropriate government authorities. This name distinguishes the company from other businesses and provides legal recognition.
4. The liability of members is limited: This is a correct statement. One of the main advantages of a limited liability company is that the personal liability of its members is limited. This means that the members are not personally responsible for the debts and obligations of the company. Their liability is limited to the amount of their investment in the company.
Based on these features, the correct option for this question is Option D: i, iii, and iv. The limited liability company has a separate legal entity, has its own corporate name, and the liability of its members is limited.