When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation. The following statement is true.
Limited liability refers to the circumstance in which a business firm's owners (shareholders) liability for losses is restricted to the amount of capital they have invested in the company and does not include any personal assets.
A limited liability corporation member who personally guarantees repayment of a loan to the business is held accountable for the debt. A limited liability company member who commits fraud on the company's behalf is unlikely to face personal culpability.
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