liability Flashcards
what is meant by limited liability
shareholders can only loose the amount money they invested in the business, not liable for any debts
what liability do sole traders have
unlimited liability
what is a limited company
company owns assets and pays the debts
has a separate legal identity to the founder.
owned by shareholders run by a founder.
shareholders not liable for debts
what is an unincorporated business
no legal difference between owner and business
what is an incorporated business
when there is a separate legal difference between owner and business
what liability do unincorporated buisness’s have
unlimited liability
what liability do incorporated buisness’s have and who owns them
limited liability
owned by shareholders
what is unlimited liability
Business owner is personally responsible for all debts
If business fails, owner is liable for debts owed.
give 2 example’s of incorporated business
private limited company
public limited company
give 2 examples of unincorporated business
sole trader
partnership
