In which form are owners called members with liability generally limited to the amount invested?

In which form are owners called members with liability generally limited to the amount invested?

• A. Sole Proprietorship
• B. Partnership
• C. Limited Liability Company
• D. Corporation

Answer: (C)

The form that uses the term members and keeps liability limited to what each person has invested is the Limited Liability Company. In an LLC, owners are called members, and their liability is typically limited to their capital contributions. This protects personal assets from business debts, unlike a sole proprietorship or general partnership where owners can be personally liable for obligations. While corporations also provide limited liability, their owners are called shareholders, not members, which is why the LLC fits the description best.

The form that uses the term members and keeps liability limited to what each person has invested is the Limited Liability Company. In an LLC, owners are called members, and their liability is typically limited to their capital contributions. This protects personal assets from business debts, unlike a sole proprietorship or general partnership where owners can be personally liable for obligations. While corporations also provide limited liability, their owners are called shareholders, not members, which is why the LLC fits the description best.