A distinguishing characteristic of a limited liability company is that it
A distinguishing characteristic of a limited liability company is that it
- A) is a collection of many sole proprietors
- B) is a multiple partnership
- C) can sue and be sued
- D) has limited resources
Correct Answer: C) can sue and be sued
Explanation
The question is asking about a characteristic that sets a limited liability company (LLC) apart from other types of businesses. The options given are A, B, C, and D.Option A suggests that an LLC is a collection of many sole proprietors, but this is incorrect. An LLC is a separate legal entity from its owners, meaning it is not a collection of sole proprietors.
Option B suggests that an LLC is a multiple partnership, but this is also incorrect. An LLC can have multiple owners, but it is not a partnership.
Option C correctly states that an LLC can sue and be sued. This means that the LLC has legal standing and can be held accountable for its actions in court. This is a key characteristic of an LLC.
Option D suggests that an LLC has limited resources, but this is not the distinguishing characteristic of an LLC. LLCs can have significant financial resources and are not necessarily limited in this regard.
In summary, the correct answer to the question is Option C: an LLC can sue and be sued. This is a key characteristic of an LLC, which sets it apart from other types of businesses.