Liability Flashcards
1
Q
What is limited liability?
A
Owner and business are different legal entities. They are incorporated businesses. Shareholders personal assets are not at risk in the event of the business incurring debts (loans or creditors).
2
Q
What types of businesses have limited liability?
A
Private Limited Companies and Public Limited Companies.
3
Q
What is unlimited liability?
A
Owner and business is the same legal entity. Owner is responsible for all debts the business incurs. Unincorporated businesses.
4
Q
What types of businesses have unlimited liability?
A
Sole traders and partnerships
