2.1.3.Liability

Question 1

Unlimited liability

Answer 1

Soletraders, partnerships
Unlikely to grow significantly as:
-Owners is liable for business debts meaning there’s a risk of losing all their personal assets if business fails. No protection of personal assets.
-This because the business owed money can chase the owners to settle those debts incurred by business. This can be those who have paid in advance etc.

Question 2

Limited liability

Answer 2

Shareholders
legal distinction between business and its owners.
Cannot lose more than they invest into the business.
Some individuals rack up debts before owners place business into voluntary liquidation

Question 3

Sole trader/partnership

Answer 3

-Owners capital
-bank finance
-Leasing
-Trade credit

Question 4

Sole trader/partnership

Answer 4

-Owners capital
-bank finance
-Leasing
-Trade credit

Question 5

Private and public limited company

Answer 5

-Share capital
-Bank finance
-Angel or Venture capital investment
-Peer to peer funding
-Leasing
-Trade credit