2.1.3 liability Flashcards
1
Q
what is unlimited liability?
A
means that the business owners are personally liable for any loss that a business makes
2
Q
which type of business has unlimited liability?
A
unincorporated businesses e.g sole traders, partnerships
3
Q
what is limited liability?
A
is where the liability of a company is detached from the company. shareholders can loose their investment, but their personal belongings are safe
4
Q
which type of business has limited liability?
A
- private limited companies
- public limited companies
- incorporated businesses
5
Q
what funding is appropriate for sole traders and partnerships with unlimited liability?
A
- owners capital/ personal savings
- retained profit
- loans
- grants
6
Q
what funding is appropriate for private/ public companies with limited liability?
A
- share capital
- retained profit
- bank loans
- business angels
- venture capital
