Question
Which of the following statements is incorrect?
Select one:
a. The liability of the shareholders of a limited company is limited to their investment in the company.
b. The minimum number of members of a partnership is two (2).
c. Under a sole trader, the owner is not responsible for the liabilities of the business when the business goes bankrupt.
d. Thers of a partnership is responsible for the liabilities if the partnership is bankrupt.
Select one:
a. The liability of the shareholders of a limited company is limited to their investment in the company.
b. The minimum number of members of a partnership is two (2).
c. Under a sole trader, the owner is not responsible for the liabilities of the business when the business goes bankrupt.
d. Thers of a partnership is responsible for the liabilities if the partnership is bankrupt.
Ask by Sanders Pena. in Malaysia
Dec 06,2024
Upstudy AI Solution
Tutor-Verified Answer
Answer
The incorrect statement is c. Under a sole trader, the owner is not responsible for the liabilities of the business when the business goes bankrupt.
Solution
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Bonus Knowledge
Ah, the exciting world of business structures! To clarify your options, in a sole trader setup, the owner is actually fully responsible for the liabilities incurred by their business. So, if things go downhill, the owner is on the hook for all debts, which isn’t exactly ideal for the faint-hearted!
As for partnerships, yeah, each partner is liable for debts too, even if one partner makes a poor choice. So, always choose your partners wisely—think of it like dating, but with money on the line!
