2.1.3 Liability Flashcards
1
Q
What is limited liability
A
Only liable for their original investment should the business fall into debt ( personal assets safe)
2
Q
2 forms of limited liability companies
A
Public limited
Private limited
3
Q
Finance suitable for limited liability
A
Retained profit
Sate of assets
Government grafts
VC
4
Q
What is unlimited liability
A
If a business has debt the owner must pay even if this means selling own possessions
5
Q
2 main business form that use unlimited liability
A
Sole traders
Partnerships
6
Q
Finance suitable for unlimited liability
A
Loans (bank)
Private investors (angels)
Credit cards
Crowd funding
Trade credit
Owners saving
Overdraft (bank)
7
Q
Implications of unlimited liability
A
Sell own assets = business and owners seen as one legal entity = liable for debts
