What is limited liability?
Where shareholders are only liable for the value of their investment as the company is a separate legal entity.
What is unlimited liability?
When the owners of a business are personally liable for the debts of a business. If the business fails and is left owing money these debts can be recovered from the owner no matter the amount meaning the owner may be forced to sell personal assets such as their car. If the owners can’t pay they may be declared bankrupt.
What types of finance are suitable for businesses with limited liability?
Retained profit
Sale of assets
Business angels
Share capital
Venture capital
Leasing
Trade credit
Loans
Overdrafts
What types of finance are suitable for businesses with unlimited liability?
Owners capital
Family and friends
Crowd funding (usually smaller businesses)
Leasing
Trade credit
Grants
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2.1.1/2.1.2-Internal And External Finance22
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2.1.3-Liability4
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2.1.4-Planning8
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2.2.1-Sales Forecasting3
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2.2.2-Sales, Revenue And Costs9
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2.2.3-Breakeven6
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2.2.4-Budgeting10
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2.3.1-Profit14
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2.3.2-Liquidty9
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2.3.3-Business Failure5
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2.4.1-Production,Productivity And Efficeincy14
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2.4.2-Capacity Utilisation7
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2.4.3-Stock Control7
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2.4.4-Quality Management10
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2.5.1-Economic Influences16
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2.5.2-Legislation12
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2.5.3-The Competitive Environment7
