3 - Liability

Question 1

unlimited liability

Answer 1

shareholders are liable for business activities and losses, they are sesepatble to loosing their personal assets

Question 2

limited liability

Answer 2

shareholders are a serperate entitiy from the business and will not have personal assets taken away to cover losses of the business

Question 3

implications of unlimited liability

Answer 3

• can loose personal assets
• liable for unlawful acts commited by employees and owners
• easier to source money from lenders

Question 4

implications of limited liability

Answer 4

• seperate legal identity from the business
• personal assets cannot eb taken