Understanding Business Liabilities

What determines who is liable for a business's debts?

• The location of the business

• The legal structure of the business

• The type of products the business sells

• The number of employees in the business

Which type of business structure offers limited liability?

• Franchise

• Private limited company

• Partnership

• Sole proprietorship

In a limited liability company, what is the maximum loss an owner can face?

• Their personal assets

• The amount they invested

• The total business debt

• Their annual salary

Which business structure is associated with unlimited liability?

• Corporation

• Limited liability partnership

• Sole trader

• Public limited company

What risk do owners face in an unlimited liability business?

• Being exempt from all business debts

• Losing personal assets to cover business debts

• Losing only their business investment

• Only losing their business reputation