Compare potential liability of owners of proprietorships, Financial Management

Assignment Help:

Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations.

The sole proprietor has infinite liability for matters relating to the business.  This means that the sole proprietor is accountable for all the responsibilities of the business, even if those obligations go above the amount the proprietor has invested in the business.

Each partner in a partnership is typically liable for the activities of the partnership as a whole.  Still if there are a hundred partners, each one is technically in charge for all the debts of the partnership.  If ninety-nine partners announce personal bankruptcy, the hundredth partner still is in charge for all the partnership's debts.

A corporation is a legal unit that is responsible for its own activities.  The corporation's owners, Stockholders have limited liability for the corporation's activities.  They can't lose in excess of the amount they paid to buy the corporation's stock.

 

 


Related Discussions:- Compare potential liability of owners of proprietorships

Disadvantages of just-in-time inventory management, Q. Disadvantages of jus...

Q. Disadvantages of just-in-time inventory management? A JIT inventory management system mayn't run as smoothly in practice as theory may predict since there may be little room

Advantage of profitability index method, Q. Advantage of Profitability Inde...

Q. Advantage of Profitability Index method? Advantage of PI method:- (i) Similar to the other DCF techniques the PI method as well takes into account the time value of money

Payback period and irr, To look into the feasibility of a new production sy...

To look into the feasibility of a new production system, K-Pad, the largest P.C. producer in the region, has spent $88,000 on the technical feasibility study. In view of the favora

Explain pro forma financial statements management goals, Explain how manage...

Explain how management goals are incorporated into pro forma financial statements. Management put a target goal and forecasters makes pro forma financial statements under the

Why iceq go beyond icq, ICEQ'sgo beyond ICQ's Discover whether erro...

ICEQ'sgo beyond ICQ's Discover whether error or fraud is possible. Concentrates on significant frauds or errors which might be possible and so only a handful of key con

Evaluate the extent to which the balanced scorecard, Evaluate the extent to...

Evaluate the extent to which the Balanced Scorecard: The Balanced Scorecard has been described as an effective measurement system which enables managers of an organisation to

Debt finance, Ask queswtion #Minimum 100 words accepted# what are the chara...

Ask queswtion #Minimum 100 words accepted# what are the characteristics of debt finance? What are the similarities and differences between debt finance and ordinary share capital

Financial statement, Telephone service costs the Eggleston Motor Hotel $250...

Telephone service costs the Eggleston Motor Hotel $250 per week. The business pays its phone service bill on the fifteenth day of each month, but it prepares its financial statemen

Relationship between bond price and time, Relationship between Bond Price a...

Relationship between Bond Price and Time   (If Interest Rates are Constant) The bond price changes as the bond moves closer to its maturity. If the bond is quoted

What is risk adjusted discount rate, Q. What is risk adjusted discount rate...

Q. What is risk adjusted discount rate? The risk adjusted discount rate includes two rates viz (i) Risk-free rate: - Risk free rate is the usual rate or the usual discount r

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd