Limited Liability in a Company Structure

Steps:

• Identify the change: Partnership exposes personal assets to business debts; limited company separates them.
• Recall key feature: Shareholders in a limited company have limited liability.
• Evaluate options: Match benefits to liability protection, not dispute resolution or asset merging.
• Select best: Protection of personal assets aligns with core advantage of incorporation.

Why B is correct:

• Under company law, limited liability restricts shareholders' risk to their share capital, shielding personal assets from company debts (e.g., Companies Act provisions).

Why the others are wrong:

• A: AGMs handle company matters, not personal disputes between shareholders.
• C: Limited companies legally separate personal and company assets.
• D: Share value depends on business performance, not guaranteed by conversion.

Final answer: B