Limited Liabilty Flashcards
1
Q
What is limited liability
A
When a business is responsible for their own debts
2
Q
Example of unlimited
A
Sole trader and partnership
3
Q
Example of limited liability
A
Plc and LTD
4
Q
Why do businesses change from a sole trader to a private limited company
A
The owners are responsible for what they invest in because operating as a plc or LTD leads to less Risk therefore more likely to attract investors
With capital share means businesses have funds to invest in new equipment therefore more revenue
