When Friedo and Miriam want to open their bookstore business, while not risking their personal properties, it is advisable that they opt for incorporation of a limited liability company as a suitable form of business corporation. Therefore, the option C holds true.
What is the significance of a limited liability company?
A limited liability company, as the name suggests, is such a form of business organization where the owners of the business are liable for their proportion of ownership or capital in the business. The liability is limited and restricted.
Similarly, in the case given above, if Friedo and Miriam incorporate their limited liability company, they will not have to worry about risking their personal properties in the business, just what both of them will to do when investing start-up capital in the business.
Therefore, the option C holds true regarding the significance of a limited liability company.
Learn more about a limited liability company here:
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