limited and unlimited liability

define liability

liability is a financial or legal obligation that a company owes to another party, requiring future payment of money, goods, or services

what is limited liability

only liable to lose the amount that you have invested, wont lose any personal assets to cover any debt that the business has built up, incorporated - owner and business two separate legal entities

examples of business with limited liability

private limited companies and public limited companies

what is unlimited liability

responsible for all debts and could lose personal assets if the business faces financial difficulties, unincorporated - where the owner and business are classed as the same legal entity

examples of business with unlimited liability

sole traders and partnerships