Which term describes a form of business ownership where the owners' financial responsibility is limited to their investments?

The term that accurately describes a form of business ownership where the owners' financial responsibility is limited to their investments is "limited liability." In a limited liability setup, such as in limited companies, the owners or shareholders are not personally held responsible for the business's debts beyond their investment in shares. This means that if the company encounters financial difficulties, the personal assets of the owners are protected, and they can only lose the amount they have invested in the business.

This structure encourages investment because potential investors are more willing to commit their funds knowing that their personal finances are safeguarded against business losses. It is a significant feature of many corporate entities, allowing them to attract capital while minimizing risk for their owners.

In contrast, unlimited liability means that owners are personally responsible for all debts and obligations of the business, which could put their personal savings at risk. Shareholder liability generally refers to the same principle of limited liability; however, it is not the term used to describe the entire structure of ownership in this context. Personal liability directly implies responsibility for financial commitments, which does not encapsulate the limited risk aspect defining this type of ownership.