A limited liability company is owned by________________

Step 1: Analyze the question The question asks who owns a limited liability company. Ownership of a business depends on its legal form.

Step 2: Explain the concept A limited liability company (a "Ltd" or "PLC" in Nigeria, registered with the Corporate Affairs Commission under CAMA) is a separate legal entity. Its capital is raised by selling shares. Anyone who buys shares becomes a shareholder and therefore a part-owner of the company. The liability of each shareholder is limited to the amount they invested or agreed to pay for their shares. Their personal property cannot be taken to settle the company's debts.

Step 3: Check each option

• A. a bank: A bank may lend money to a company, but that makes it a creditor, not an owner.
• B. an individual: A sole proprietorship is owned by one person, and the owner has unlimited liability. This describes a sole trader, not a limited liability company. (A private company can sometimes have a single member, but the general ownership description is still shareholders.)
• C. two or more partners: This describes a partnership, where partners usually have unlimited liability.
• D. share holders: Correct. Shareholders contribute capital, own the company, and have limited liability.

Step 4: Answer The limited liability company is owned by shareholders, which is option D.

Step 5: Exam tip Link the form of business to its owners:

• Sole proprietorship → one individual
• Partnership → partners
• Limited liability company → shareholders
• Cooperative society → members
• Public corporation → government

Whenever you see "shares" or "limited liability," think shareholders.