2.1.3 Liability Flashcards
1
Q
what is limited liability?
A
a business owner is only liable for their original investment should the business fall into debt, their personal possessions aren’t at risk (PLC/Ltd)
2
Q
what is unlimited liability?
A
if the business has debts, the owner must pay even if it means selling their selling their own possessions
3
Q
what businesses have limited liability?
A
PLC’s/Ltds
4
Q
what businesses have unlimited liability?
A
sole traders/partnerships
5
Q
what sources of finance are appropriate for businesses with limited liability?
A
-retained profit
-sale of assets
-government grants
-share capital
-venture capital
-loans
6
Q
what sources of finance are appropriate for businesses with unlimited liability?
A
-loans
-crowd funding
-business angels
-owner’s savings
-overdraft
