Question

In which of the following entities will all persons who participate in management be protected from liability beyond their investment?

1. C corporation.

2. S corporation.

3. Limited liability company.

4. Limited partnership.

Select one:

a. 1 only.

b. 2 and 3.

c. 1 and 4.

d. 1, 2, and 3.

Answer 1

The correct answer is option d. i.e 1,2 and 3.

Ability of persons in C corporation, s corporation and limited liability company is limited to the amount of their investment.

In limited partnership there are two type of partners. One is general partner and the other is limited partner. General partner participates in the management but there liability is not limited to the amount of their investment. Limited partner do not participate in the management and there liability is limited to the amount of their investment.

Thus option d is correct.