The responsibility of business owners for all the debts of the business is known as:
A) Limited liability
B) Unlimited liability
C) Limited equity
D) Unlimited indebtedness

Question

Quizplus · Accepted Answer

Unlimited liability means that the business owner is personally responsible for all the debts of the business. This can put the owner's personal assets at risk in the event of the business having financial problems or going bankrupt. Limited liability, on the other hand, protects the owner's personal assets by limiting their responsibility for the business's debts to the amount of investment they have made in the business. Limited equity and unlimited indebtedness are not relevant terms in this context.

The Responsibility of Business Owners for All the Debts of the Business