Which type of business structure has limited liability, protecting investors if it fails?

The correct choice represents a private limited company, which provides a significant advantage for its investors in that it offers limited liability protection. This means that the personal assets of the investors are safeguarded against any debts or liabilities incurred by the business. If a private limited company fails, the financial responsibility of its shareholders is generally limited to the amount they have invested in the company. This structure encourages investment, as individuals can engage in business ventures without risking their personal savings or assets.

In contrast, other business structures, such as a sole trader or partnership, do not offer this level of protection. In a sole trader setup, the individual is personally liable for all business debts, meaning their personal assets could be at risk. Similarly, in a partnership, partners can be held jointly responsible for the debts of the business, placing their personal assets in jeopardy as well. The public sector option does not apply directly to business structures aimed at profit-making endeavors; it typically refers to government-run services or entities rather than a specific type of business geared towards individual investors. Thus, the private limited company stands out for its limited liability feature, making it the correct choice.