A business entity where, in the event of the business being unable to pay its creditors as debts fall due, the owner(s) cannot be forced to sell personal assets or wealth to repay these debts is _____________.
Question
A business entity where, in the event of the business being unable to pay its creditors as debts fall due, the owner(s) cannot be forced to sell personal assets or wealth to repay these debts is _____________.
Solution
The business entity described is a "Limited Liability Company" or LLC. In an LLC, the owners (also known as members) are not personally responsible for the company's debts and liabilities. This means that creditors cannot go after the members' personal assets (like their houses or cars) to pay off the company's debts. This is different from a sole proprietorship or a general partnership, where the owners are personally liable for the company's debts.
Similar Questions
The debts of the business are also the debts of the owner(s) is _________ and applies to ________.
The obligations or debts of a business to third party creditors.Select one:a.Assetsb.Journalc.Ledgerd.Liabilities
The business structures that protect the personal assets of the owners from the creditors of the business are:Group of answer choicespartnership and company.trust and partnership.company and trust.company and sole trader.
A person who owes money to a business is known as a:Question 2Answera.Partnerb.Debtorc.Creditord.Investor
Name the form of Business Organisation in which members are jointly and individually liable to pay firms debts :
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.