2.1.3 - Liabilty

Question 1

What is limited liability?

Answer 1

Owner and business have separate legal identities

Question 2

What is Unlimited Liability?

Answer 2

Owner and Business are seen as one

Question 3

Finance for limited liability and what is it easier to achieve?

Answer 3

• Easier to encourage investors
• Use share capital as they can only lose what they invest

Question 4

Finance for unlimited liability

Answer 4

• Likely to use internal sources of finance

Question 5

Why may investors not invest in limited liability businesses?

Answer 5

Some may find limited liability as a back up for a risky idea so invest in limited companies