BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You are responsible if the business fails
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You are not responsible if the business fails
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You can make an unlimited amount of money
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It is hard to start a business
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Detailed explanation-1: -Unlimited liability refers to the full legal responsibility that business owners and partners assume for all business debts. This liability is not capped, and obligations can be paid through the seizure and sale of owners’ personal assets, which is different than the popular limited liability business structure.
Detailed explanation-2: -In business, unlimited liability means that the owner(s) of a business are entirely responsible for its debts.
Detailed explanation-3: -Unlimited liability is when one or more business owners or partners are liable for their company’s debts and tax compliance. It is very different to a limited liability company (LLC), whose business structure is designed specifically to insulate individual partners or stakeholders from risk.
Detailed explanation-4: -What Is Limited Liability? Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company (LLC). In other words, investors’ and owners’ private assets are not at risk if the company fails.
Detailed explanation-5: -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.