Key Advantages of Limited Companies to Shareholders

Steps:

• Recall that limited companies offer separate legal personality and limited liability as core benefits under company law.
• Assess point 1: Separate legal identity ensures perpetual existence and contracts in the company's name, protecting shareholders from personal involvement.
• Assess point 2: Preparing financial statements is more complex due to statutory requirements like audits, not easier.
• Assess points 3 and 4: Both describe limited liability, shielding shareholders' personal assets from company debts.

Why C is correct:

• Option C selects 1 (separate legal identity for continuity) and 4 (limited liability protection), aligning with the Companies Act definition of limited companies limiting shareholder risk to invested capital.

Why the others are wrong:

• A includes 2, which misstates financial reporting as easier when it's actually more rigorous.
• B selects 3 instead of 4, but omits the duplicate emphasis on asset protection while excluding invalid 2.
• D includes 2, incorrectly claiming simplified statements, and redundantly lists 3 and 4 without 1.

Final answer: C