Functions of bile: 1. Emulsification of lipids: Increases surface area for lipase action. 2. Micelle formation: Aids in the absorption of digested fats and fat-soluble vitamins. 3. Transport and absorption of lipids. 4. Absorption of fat-soluble vitamins (A, D, E, K).Water-soluble vitamins (like B vitamins and Vitamin C) are absorbed directly by the intestinal epithelium.