2.1.3 liability Flashcards
1
Q
define limited liability
A
owners are not liable for the debts of the business, they can loose no more than what they invest
2
Q
define unlimited liability
A
owners are liable for any debts accrued by the business. even if it requires them to sell their personal assets and become bankrupt
3
Q
define bankrupt
A
when an individual is unable to meet personal liabilities
4
Q
which type of business’ have limmited liability?
A
private limited company
public limited company
5
Q
which type of business’ have unlimited liability
A
sole trader
partnership
