ch28

Question 1

limited liability

Answer 1

means that the liability of the shareholders is limited to only the amount invested if failure occurs

Question 2

unlimited liability

Answer 2

the owners of the business are responsible for any debts that the business may have so they are personally liable

Question 3

incorporated

Answer 3

the owners have separate legal identity

Question 4

unincorporated

Answer 4

no legal difference between the owners and the business

Question 5

collateral

Answer 5

an asset that might be sold to pay a lender
when a loan cannot be repaid

Question 6

ad of limited liability

Answer 6

1- takes more risks
2-more opportunities as they aren’t worrying about personal assets
3-can grow

Question 7

dis of limited

Answer 7

1-expensive
2-time consuming
3-legal requirements

Question 8

factors of finance

Answer 8

1)short term or long
2)the financial position
3)the type of expenditure for which the money is needed
4)cost (interest, administration cost)
5)the legal status of the business (limited or unlimited)

Question 9

finance for unlimited

Answer 9

1)personal savings
2)retained profits
3)mortgage
4)unsecured bank loan
5)peer to peer lending
6)crowd funding
7)bank overdraft
8)grants

Question 10

finance for limited

Answer 10

share capital
debentures
retained profit
venture capitalists
business angels