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 ...