Homework Sourse1 If a sole proprietor is found negligent of an action then
1. If a sole proprietor is found negligent of an action, then that person could face
a) limited liability.
b) stock options.
c) danger of dispute settlement.
d) a gain in business assets.
e) unlimited liability.
2.
a) that person faces liability.
b) the partnership is dissolved.
c) all partners are protected.
d) they all lose their stock.
e) all partners face unlimited liability.
3. If a corporation is formed, then the owners are known as
a) shareholders.
b) dueling sole proprietors.
c) partners.
d) LLC members.
e) stakeholders.
| If one owner of a partnership makes a bad decision that ends up in the business being sued, then |
Solution
Q1) a sole proprietor is found negligent of an action, then that person could face:
Answer - Unlimited liability, A sole proprietor, in case of any negligence in business is liable to unlimited liability, this means that He/She is liable for all the debt of the business. in this case if you as a sole proprietor not able to pay your debts then creditors ahve right to take of the amount from your business as well as personal assets.
Q2) If one owner of a partnership makes a bad decision that ends up in the business being sued, then
Answer - All partners face unlimited liability, this means that if any creditor sue any one partner and he/she is not able to pay to the creditors, then creditors will recovery his/her money from other partners. also in case businees assets are not suffiecient to pay for debts again crediotr has right to take the partners personal assets, is the one partner that was initialy sued by the creditor become defaulter in paying his debts.
Q3) If a corporation is formed, then the owners are known as
Answer - Shareholders, Shareholders are the people who owns the part of the stock of the copany in the name of share and hence are the ultimate owners of the corporation. They are people who elects the board members of the company, they share the profit of the company and also take part in decision making like mergers, joint ventures as they are the one who share the profit of the company and hence liability for the growth for the corporation.
