Question

Describe two types of business organizations in which you could obtain an ownership position while enjoying limited liability. Provide an example of a type of firm that you might find utilizing each business type

Answer 1

Two types of business organisation in which ownership can be obtained while enjoying limited liability would be-

A. In a company which is limited by shares the liability of shareholders in a company is always Limited, and shareholders are not personally liable for the loss of the company.

B. Limited liability partnership is another form of organisation in which the liability of partners are always Limited in nature and the losses cannot be recovered from the personal stakes.

Company which is limited by shares can be used to enter into business which have very high growth capability and which will required high amount of capital where as limited liability partnership isi to be entered into when a business is to be expanded at a small scale and there is not much requirement of the fund that iwill be funded by personal capital.