2.1.3 Liability Flashcards
1
Q
What is limited liability
A
The business does not have any legal obligation to pay any outstanding debts the business occurs. Cant take assets. Can only take business assets and money invested into the business
2
Q
What type of ownership has limited liability
A
PLC (a company that is able to offer its shares to the public), franchises and LTD (companies where ownership of shares is restricted.)
3
Q
What is unlimited liability?
A
The owner has a legal obligation to pay any outstanding debts that the business occurs. Even assets (personal possessions) are at risk
4
Q
What type of ownerships have unlimited liability
A
Sole trader, partnerships
