Business Ownership 1.5.4
Unincorporated - A business that does not possess a separate
legal identity from its owner(s). The owner(s) bear full liability for
any action or inaction of the business: they may sue and be sued for business activity or inactivity. The owner is the business. Most unincorporated businesses operate as sole traders.
Incorporated - means owners have their own legal identity and have limited liability. Most incorporated businesses operate as Ltd.
Unlimited Liability - business owners are personally liable for all business debts if the business can't pay its liabilities. Only unincorporated businesses have unlimited liability. If the unincorporated business fails, the owners are liable for the amounts owed.
Limited Liability - the condition by which shareholders are not liable for any debts owed by the company. They only lose the money that they have invested in the business in the form of shares. Can own things itself (assets), can sue and be sued. Companies are owned by shareholders and run by directors. The shareholders own a share of the company, but they do not own the assets, and are not liable for the debts of the company.
Incorporated - means owners have their own legal identity and have limited liability. Most incorporated businesses operate as Ltd.
Unlimited Liability - business owners are personally liable for all business debts if the business can't pay its liabilities. Only unincorporated businesses have unlimited liability. If the unincorporated business fails, the owners are liable for the amounts owed.
Limited Liability - the condition by which shareholders are not liable for any debts owed by the company. They only lose the money that they have invested in the business in the form of shares. Can own things itself (assets), can sue and be sued. Companies are owned by shareholders and run by directors. The shareholders own a share of the company, but they do not own the assets, and are not liable for the debts of the company.
Comments
Post a Comment