Question 44
Business OrganisationsUnlimited liability means
- A.the government can tax a company without limit
- B.the debts of a company must be paid out of its assets
- C.a company ceases to exist at the death of one of its owners
- D.a firm must pay its debts from business as well as private funds
- E.none of the above.
Show the answer and explanation
Answer: D (a firm must pay its debts from business as well as private funds)
Explanation
With unlimited liability the owners' personal property can be taken to pay the business's debts.