GENERAL KNOWLEDGE

Detailed explanation-1: -Some disadvantages of unlimited liability are as follows: Unlimited liability makes the owners legally responsible for all the debts and liabilities of the business. In a business with unlimited liability, both the business and personal assets of the owners may be at risk.

Detailed explanation-2: -Disadvantages of a partnership include that: the liability of the partners for the debts of the business is unlimited. each partner is ‘jointly and severally’ liable for the partnership’s debts; that is, each partner is liable for their share of the partnership debts as well as being liable for all the debts.

Detailed explanation-3: -A limited liability partnership agreement or LLP is designed to provide protection for the partnership agreement in a similar way to limited liability companies. The big benefit is that it protects the individual partner’s assets and deems the LLP as a legal entity in its own right.

Detailed explanation-4: -Sole proprietorships can, however, still hire employees without needing to change their corporate structure. However, a partnership can also be an unlimited liability company. The liability is shared between the partners unless the partnership is a limited liability partnership.

Detailed explanation-5: -Within a partnership, members are vulnerable to unlimited liability for their overall actions. Every partner is personally liable for any company debts and responsibilities. If the company lacks the assets to cover an organizational debt, then creditors can seize the partners’ personal assets to cover that debt.