Liability Flashcards
1
Q
What is limited liability?
A
The business is recognised in law so the owners assets are protected by law.
2
Q
What happens if a limited company goes bankrupt?
A
The investors only lose what they have already invested. Their personal assets are protected.
3
Q
What is unlimited liability?
A
The business is not recognised by law, so the owners assets are not protected.
4
Q
What happens if a unlimited business goes bankrupt?
A
There is NO LIMIT to what investors can lose. Personal belongings are not safe.
