limited liability/differences between sole traders and LTDs

Question 1

unlimited liability

Answer 1

sole traders are businesses owned by one person. the owner has unlimited liability. the owner is legally responsible for any debts of the business. therefore there is potential for the owner to lose his or her personal belogings to pay off any debts

Question 2

limited liability

Answer 2

private limited companies (Ltd) have limited liability. the owners and the business are separate legal entities. any debts incurred by the business belong to the business and the owners can only lose as much as they invested.

Question 3

the differences between sole traders and Ltds

Answer 3

sole traders
>more risk due to unlimited liability
>the owner has 100% control of decisions 
>owner keeps all profits
>more privacy 

Ltds
>less risk
>the control of the main owner depends on the amount of shares they own
>profits are shared
>accounts are filed with companies house and can be viewed by anyone on payment of a small fee