WAEC Economics 2012 Objective — Question 20

Question 20 of 49 from the West African Examinations Council (WAEC) Economics 2012 Objective paper, with the correct answer and a full explanation.

An arrangement in which the debts of a company can only be paid from its own assets implies

A. unlimited liability
B. transferred liability
C. limited liabilityCorrect
D. capital liability

Explanation

A company has limited liability if personal property of the owners is not affected if the firm liquidates. The debt of the firm can only be paid from its assets.

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