TQ 7.docx - 1 What is unlimited liability This is where the sole proprietor\u2019s personal assets can and will be used to cover debts from their

TQ 7.docx - 1 What is unlimited liability This is where the...

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1. What is unlimited liability? This is where the sole- proprietor’s personal assets can and will be used to cover debts from their businesses. However, this can also be used against them because debtors can take the sole-proprietors assets that are being used if something isn't paid for example. This is why it is better to keep your personal life separate from your business because this can backfire and take everything from you as well. 2. What is the purpose of a partnership agreement? The purpose of a partnership agreement is very helpful when another business that is interested in your company needs another source for something, your partner is able to use their talents as well. With a partnership agreement, you are able to divide up the responsibilities, making it more efficient for your business to run and for you to be able to effectively manage the business. You are able to utilize more talents under one partnership agreement. 3. What are the rights of the owners of a corporation? The rights of the owners of a corporation vary. These rights all depend on how much of the corporation they own. This depends because they may have more say over certain things than someone who doesn’t own as much as they do. They have the right to vote for things like policies but the amount of stocks they own do determine how much influence their votes actually have. They also have the right to receive dividends, which is a share of the company’s profits.They are also entitled to limited liability, which is very important because they are only responsible for the amount of debts in the corporation up to the amount that they invested. Which is something that benefits you depending on how much you invested. 4. What are the advantages of a sole proprietorship?
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  • Winter '12
  • MrsSmith

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