Business Forms and Liabilities: A Comprehensive Guide

Which form of business provides limits on the liabilities of some or all owner(s)?

A. Sole proprietorship

B. General partnership

C. Sole proprietorship and general partnership

D. Corporation

Answer:

The form of business that offers limits on the liabilities of its owners is a corporation.

Explanation:

The business form that offers limits on the liabilities of the owner(s) is the corporation. In a corporation, the business is considered a separate legal entity from its owners and hence, the owners or shareholders have limited liability. This signifies that the financial liabilities of the business, such as debts, are not the personal responsibility of the shareholders.

In contrast, a sole proprietorship is a business owned and managed by a single individual, who bears all the liabilities of the business. A general partnership is a business owned by a group of people, where each partner shares the profits, losses, and liabilities of the business.

The major difference between these forms of business is that in a corporation, owners have limited liability while in sole proprietorship and general partnership, owners have unlimited liability for the business's debts and obligations. Therefore, the correct answer is D. Corporation.