Which business organization typically has limited liability for owners?

• A. Sole Proprietorship
• B. Corporations
• C. Partnerships
• D. Franchise

Answer: (B)

Limited liability means owners aren’t personally responsible for the business’s debts beyond their investment. Corporations provide this protection: shareholders’ liability is limited to the money they’ve invested in the company. In contrast, a sole proprietorship puts the owner at personal risk for all debts, and a general partnership also exposes partners to personal liability (though there are variations like limited partnerships, they’re not the typical form most people think of). A franchise isn’t a legal form by itself; it’s a model that can be run under various structures, but the liability protection depends on the underlying form chosen. Because of this inherent protection for owners, the form that typically has limited liability is a corporation.