Compare potential liability of owners of proprietorships, Financial Management

Assignment Help:

Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations.

The sole proprietor has infinite liability for matters relating to the business.  This means that the sole proprietor is accountable for all the responsibilities of the business, even if those obligations go above the amount the proprietor has invested in the business.

Each partner in a partnership is typically liable for the activities of the partnership as a whole.  Still if there are a hundred partners, each one is technically in charge for all the debts of the partnership.  If ninety-nine partners announce personal bankruptcy, the hundredth partner still is in charge for all the partnership's debts.

A corporation is a legal unit that is responsible for its own activities.  The corporation's owners, Stockholders have limited liability for the corporation's activities.  They can't lose in excess of the amount they paid to buy the corporation's stock.

 

 


Related Discussions:- Compare potential liability of owners of proprietorships

Debt holders versus shareholders, Debt holders versus Shareholders A se...

Debt holders versus Shareholders A second agency problem arises because of potential conflict between stockholders and creditors. Creditors lend finances to the firm at rates w

Why are trend analysis and industry comparison, Why are trend analysis and ...

Why are trend analysis and industry comparison important to financial ratio analysis? Trend analysis assists financial analysts and managers see whether a company's current fin

Define where security returns are found less correlated, Security returns a...

Security returns are found to be less correlated across countries than within a country. Why can this be? Answer:  Security returns are less correlated possibly because countries

Analysis of financial plans, Part 1: Contingency plan Create contingency pl...

Part 1: Contingency plan Create contingency plans for the following scenarios: > One of your highly qualified consultants has given three months notice and is planning to move to a

Perform appropriate ratio analyses on the balance sheet, Perform appropriat...

Perform appropriate ratio analyses on the balance sheet and income statements of your company using techniques discussed in chapter 2 of your textbook. Compare your company to a c

Prevention of risk - method of risk management, Prevention of Risk - Method...

Prevention of Risk - Method of risk management In case of this method, the business avoids risk by taking appropriate steps for prevention of business risk or avoiding loss, su

Financial derivatives, Do you provide plaigerism free solutions to question...

Do you provide plaigerism free solutions to questions or do you only tutor?

Types of treasury bills, Types of Treasury Bills Treasury bills are iss...

Types of Treasury Bills Treasury bills are issued at various maturities, generally up to one year. Thus, they are useful in managing short-term liquidity. At present, the GOI (

Event study, Event studies are one of the most powerful and widely used app...

Event studies are one of the most powerful and widely used applications of the capital asset pricing model (CAPM). An event study is an attempt to determine whether a particular ev

Calculate the cca allowance anfd the pv of tax shield , Home Inc. is consid...

Home Inc. is considering buying a new piece of equipment, which will cost $715,000 and has an economic life of 5 years, in order to produce a new line of product.  The company beli

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd