The liability of the owners of a company may either be limited or unlimited. This articles looks into the differences between various forms of liability.
Unlimited liability related to the situation where the owners share joint and several responsibility for the entire amount of debt and other liabilities of the business.
In contrast, limited liability is a type of liability that does not exceed the funds invested in a business association.
Most typically, partnerships can be either limited or unlimited. In case of an unlimited partnership, the partners are liable to the debts and oblgiations fo the partnership with all their property.
Companies usually operate with limited liability, where their liability does not exceed the value of their shares or other type of capital contribution.
