Business Liability

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    Business Liability

    Unlimited Liability is where owners are liable for business debts, aka can have their personal assets seized to clear the debt. Sole traders & Partnerships.

    Limited Liability is where owners can only lose what they have invested in the business, due to the process of incorporation. PLC & LTD.

     

    Effects of liability on sources of finance

    Sole traders and partnerships likely to rely on following sources:

    -Owners capital

    -Bank finance (loans and overdraft)

    -Leasing

    -Trade credit

     

    Private and public limited companies can use:

    -Share capital

    -Bank finance (loans and overdraft)

    -Angel or venture capital investment

    -Peer to peer or crowdfunding

    -Leasing

    -Trade credit

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