Liability

Question 1

Limited Liability

Answer 1

a legal status that means shareholders can only lose the originial amount they invested in a business

Question 2

Unlimited Liability

Answer 2

a legal status which means that buisness owners are liable for all business debts

Question 3

Three factors which influence the type of finance chosen

Answer 3

1) Financial position of the business
2) The type of expenditure for which the money is needed
3) The Cost of the finance method chosen

Question 4

3 sources of finance with unlimited liability

Answer 4

1) Personal savings
2) Retained profit
3) Unsecured bank loans

Question 5

3 sources of finance with limited liability

Answer 5

1) Share capital
2) Debentures
3) Venture Capitalists