Business Ownership: Limited and Unlimited Liability

What does limited liability mean for business owners?

• Owners are responsible for all business debts.

• Owners are only responsible for debts up to their investment.

• Owners can use personal assets to pay business debts.

• Owners have no responsibility for business debts.

Which type of business typically has limited liability?

• Not-for-profit organization

• Private limited company

• Partnership

• Sole trader

What is a creditor in the context of business?

• A person who owes money to a business

• A person who is owed money by a business

• A person who invests in a business

• A person who manages a business

What does unlimited liability mean for business owners?

• Owners are responsible for debts up to their investment.

• Owners are not responsible for any business debts.

• Owners are personally responsible for all business debts.

• Owners can only lose their initial investment.

Which of the following is a riskier option for business owners?

• Unlimited liability

• No liability

• Limited liability

• Shared liability

What is the main difference between limited and unlimited liability?

• The type of products sold

• The level of risk owners are willing to take

• The number of business owners

• The location of the business

Which business structure is most likely to have 'Ltd' after its name?

• Partnership

• Sole trader

• Not-for-profit organization

• Private limited company

What can a creditor take from a business with limited liability?

• The business name

• Future profits of the business

• Assets or finances belonging to the company

• Personal assets of the owners

Which of the following is NOT a type of business ownership mentioned?

• Partnership

• Sole trader

• Not-for-profit organization

• Corporation