MANAGEMENT

Detailed explanation-1: -Two types of business organizations have unlimited liability: sole proprietorships and general partnerships.

Detailed explanation-2: -(1) Each of the Partners in a General Partnership has unlimited liability and is personally liable jointly and severally with the other Partners for the whole amount of any Partnership Obligation incurred while he is a Partner.

Detailed explanation-3: -Sole proprietorships do not have the protection of limited liability. Instead, the sole owner has unlimited liability. This means that the sole owner is personally liable for the debts and expenses of the business. If the business is sued, the sole owner risks losing their personal assets.

Detailed explanation-4: -An example of unlimited liability is where a sole owner is responsible for a business, making themselves and the business entity one and the same thing. If the company encounters cash flow problems and cannot pay its debts, creditors can use the owner’s personal assets to pay the company debts.