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.
Question
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.
Solution
The business structures that protect the personal assets of the owners from the creditors of the business are: company and trust.
Here's why:
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Company: A company is a separate legal entity from its owners (shareholders). This means that if a company incurs debts, the creditors can only go after the company's assets and not the personal assets of the shareholders.
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Trust: A trust is a legal arrangement where assets are held by a trustee for the benefit of beneficiaries. If a trust incurs debts, the creditors can only go after the assets held in the trust and not the personal assets of the trustee or beneficiaries.
On the other hand, in a partnership or sole trader business structure, the owners are personally liable for the debts of the business. This means that if the business cannot pay its debts, the creditors can go after the personal assets of the owners.
Similar Questions
In which business structure is the owner personally liable for business debts and obligations?1 puntoA) CorporationB) Limited Liability Company (LLC)C) PartnershipD) Sole Proprietorship
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 _____________.
A characteristic of the corporate form of ownership is limited liability which means thatMultiple Choiceowners are only liable for the amount they invest in the business.owners are liable in proportion to the total number of owners in the business.owners are only liable for debts that the corporation cannot cover.liability is limited to the decision makers of the corporation.liability for the corporation's debts decreases over time.
Name the form of Business Organisation in which members are jointly and individually liable to pay firms debts :
The obligations or debts of a business to third party creditors.Select one:a.Assetsb.Journalc.Ledgerd.Liabilities
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