JAMB Economics 2022 Objective — Question 36

Question 36 of 40 from the Joint Admissions and Matriculation Board (JAMB) Economics 2022 Objective paper, with the correct answer and a full explanation.

36. Limited liability means

A. (A) when a company winds up, its debts will be paid from its assets and the assets of the owner
B. (B) when a company winds up, its debts are payable only from the assets of the companyCorrect
C. (C) when a company winds up, its debts are payable with the assets of the owners
D. (D) when a company winds up, its debts will be written off

Explanation

Limited liability means the liability of the owners is limited to the amount they contributed to the business. When the company winds up, debts are settled only from the assets of the company.

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