What is limited liability in business studies

Answer 1

Limited liability is a legal concept in business studies that protects the personal assets of business owners in the event of business-related liabilities or debts. It means that the owners' liability is restricted only to the amount of investment they have made into the business and they are not personally responsible for the debts and obligations of the business beyond this amount. This ensures that personal assets like homes, cars, and personal savings are not at risk in case the business faces financial difficulties or legal issues. Limited liability is commonly associated with specific business entities such as limited liability companies (LLCs) and corporations.