Unlimited liability?

  • 0 votes

what is limited and unlimited liability in simple terms please :P

Posted Mon 30th April, 2012 @ 16:04 by michelle

1 Answer

  • 2 votes

Liability is another term for a debt, so unlimited liability is when a soletrader gets into trouble with debts, he or she runs a risk of losing everything they own as they signed the business to thier own name, hense their trade name, e.g Jakie's clothing.

But if you have limited liability on the business, this means that all of the assests belong to thet business, so when in debt the business will be forsed to sell their assets, but it will not affect the owner personally.

hope that helps...=)

Answered Mon 30th April, 2012 @ 20:03 by VeroFoy