Which of the following are advantages of trading as a limited liability company?
Operating as a limited liability company makes raising finance easier because additional shares can be issued to raise additional cash.
Operating as a limited liability company is more risky than operating as a sole trader because the shareholders of a business are liable for all the debts of the business whereas the sole trader is only liable for the debts up to the amount he has invested.
A. 2 only B. 1 only C. Neither 1 or 2 D. Both 1 and 2
(2) is incorrect - shareholders are only liable for the debts of the business up to the amount they have invested in shares, whereas sole traders are liable for all of the debts of the business.
