In an LLC, which statement is true?

• A. Members are not personally liable for the company's debts or liabilities
• B. Partners have unlimited liability
• C. LLCs do not offer liability protection
• D. Liability is dependent on members' credit scores

Answer: (A)

Limited liability protection is the defining idea here: in an LLC, members are generally not personally responsible for the company's debts or liabilities. The LLC is treated as a separate legal entity, so creditors typically can pursue only the LLC’s assets, not the members’ personal assets. Exceptions exist if a member personally guarantees a loan, engages in fraud or illegal acts, or if the corporate veil is pierced due to improper conduct or commingling of personal and business finances.

That’s why the statement is true: it reflects the hallmark of an LLC’s liability protection. The other statements don’t fit: a general partnership idea about unlimited liability doesn’t apply to an LLC; LLCs do offer liability protection, so claiming they don’t is incorrect; and personal credit scores don’t determine an LLC’s liability—liability protection comes from the corporate structure and any specific legal exceptions.