Theme 2 - 1.3 Liability Flashcards
1
Q
What is Limited liability ?
A
Where owners are only responsible for the value of their debts up to their financial investments This means that a creditor can only take assets and finances that belong to the company.
2
Q
What is unlimited liability ?
A
Where the owners are responsible for the value of their debts, meaning a creditor can take personal assets and finances to cover the costs.
3
Q
What does bankrupt mean ?
A
Where an individual or organisation is unable to pay their debts.
4
Q
What is a creditor ?
A
Those that are owed money by an organisation or individual.
