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