BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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works on his own.
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can only hire a limited number of employees.
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is personally responsible for all business debts.
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cannot get a bank loan.
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Detailed explanation-1: -Unlimited liability means that the business owners are personally liable for any loss the business makes. Sole traders and partnerships often have unlimited liability.
Detailed explanation-2: -Unincorporated businesses such as sole traders have unlimited liability. In other words, the individual who has started the business will be personally liable for business debts until they choose to incorporate.
Detailed explanation-3: -Explanation: A) Unlimited liability means the owner is responsible for all the debts of the firm. Because the liability is unlimited, the owner’s personal assets may be used to pay the debts of the business.
Detailed explanation-4: -In an unlimited liability company, the owner is inextricable from the business and is personally accountable for the company’s liabilities. This also means that they are entitled to the company’s profits after taxes.