[简答题](a) In relation to partnership and company business forms, explain the meaning of limited liability. (4 marks)

参考答案:  In this context, liability refers to the extent to which shareholders in companies are responsible for the debts of their companies and limited liability indicates that a limit has been placed on such liability. The point is that the limitation on liability is enjoyed by the member shareholders rather than the company. One of the major advantages of forming a company is that the members of the company may achieve limited liability. The great majority of registered companies are limited liability companies. This means that the maximum liability of shareholders is fixed and cannot be increased without their agreement. There are two ways of establishing limited liability in relation to a registered company. Members of ordinary partnerships, formed under the Partnership Act AHI0, do not have the advantage of limited liability and are personally liable for any partnership debts. However, non-active members of partnerships formed under the Limited Partnerships Act AI0G may benefit from limited liability, as long as they do not get involved in the operation of the business. All members of partnerships formed under the Limited Liability Partnerships Act B000 benefit from limited liability set at the extent of their capital contribution.