Liability (Edexcel A-Level Business): Flashcards
📚Flashcards
Practise the cards
10 cards from this deck
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Practise the cards
10 cards from this deck
Unlimited liability
Unlimited liability
Owners personally responsible for all business debts
Limited liability
Limited liability
Shareholders only lose their investment amount
Unincorporated businesses
Unincorporated businesses
No legal difference between owners and business
Incorporated businesses
Incorporated businesses
Business has separate legal identity from owners
Shareholders
Shareholders
Owners of limited liability businesses
Risk with unlimited liability
Risk with unlimited liability
Personal assets can be sold to pay business debts
Max loss for shareholders
Max loss for shareholders
Only their investment in shares
Separate legal identity
Separate legal identity
Business can be sued/liquidated, not the owners
Capital expenditure
Capital expenditure
Investment in expensive long-term assets
Revenue expenditure
Revenue expenditure
Day-to-day operational spending