1.2 different business forms Flashcards
1
Q
What is the equation for market capitalisation?
A
share price x number of shares issued
2
Q
What does unlimited liability mean?
A
The business and you are the same thing and you are responsible for paying off all your debt
3
Q
What does limited liability mean?
A
You and the business are two legal identities and you are not responsible for repaying your debt
4
Q
How will limited liability affect suppliers?
A
It does not protect the suppliers as debt does not have to be paid to them
5
Q
How will limited liability affect shareholders?
A
It means that they will lose shares but will not have to sell their assets
6
Q
How will limited liability affect banks?
A
They will only get the value of the business not peoples assets
