Ownership and Liability
A business can be owned in a number of different ways including private and public ownership, and not-for-profit businesses. They have different features and objectives that we will explore in the next few pages.
One important feature of private businesses that you need to be aware of is liability. Liability relates to how liable business owners are for any debts the business has should it go bankrupt. Liability may be limited or unlimited. Click on the words to find out more
Unlimited Liability
In businesses with unlimited liability, the owner will be liable for all debts if the business goes bankrupt. This may mean that the owner would have to sell personal property such as a house or car to pay off the debts of the business.
Limited Liability
On the other hand, in businesses with limited liability, they can generally only lose the money that the owners have invested in the company.