Characteristics Of A Business Entity

The business entities of corporations and partnerships share many similarities, however key difference exist, primarily in terms of formation, taxes and liability. This section will largely address the issue of liability, in terms of the effects of damages, disclosure requirements and personal liability for both corporations and partnerships. Additionally Amazon will be examined as a partnership rather than a corporation to further illustrate these differences.

There is also the concept of secondary liability. This means that if, for example, an employment agency

Liability- This falls directly on the owner. All debts, liabilities and losses fall on the owner. The owner's assets can be used to alleviate the business's debt.

• Liability: The owner has unlimited liability. When the business fails it is up to the owner to pay all the creditors off.

LIABILITY – There is no separation between the individual and the business. As the owner and operator of a sole proprietorship, all of the profit and loss is the personal responsibility of the business owner creating unlimited liability.

* An owner has unlimited liability both personally and as the company owner. Liability is a disadvantage in a sole proprietorship.

LIABILITY – The owner is held responsible for all debts and expenses accrued by the company via the concept of unlimited liability. If the expenses and debts aren’t satisfied, the owner of the business can be sued for breach of contract.

Limited liability company is a separate entity that separates the owner of the business. LLCs are no longer new and untested legal entity, they recognized in all fifty states and have established case law and statutes.

For commercial businesses, general liability can be defined as the type of insurance that “protects the insured from most liability exposures other than automobile and professional liability.” These types of risk present themselves on the premise of business operations, and lawsuits brought against the insured either through injury or professional contracts that the insured is included in. Actions of the employees of the company also fall into general liability.

“Liabilities are debts: money you owe. Every business carries some liabilities—for example, ongoing payments to suppliers, rent for your office, compensation to employees, or fees for contractors” (Mancuso, 2014). Added liabilities may result if a business is ravaged by a fire or flood or if the business owner(s) become the victim of a lawsuit—for example, a patron, client or customer decides to sue your company after hurting themselves on company property. It is the intent of this paper to examine the role and responsibility of liability in different types of businesses from sole proprietorships to

Liability for one’s actions means that one can rightly be made to pay for the adverse effects of one’s actions on others. (DeGeorge, 104) Liability does not necessarily involve moral responsibility for the action taking place, although. “Strict liability” stresses that there is no excusing conditions that are accepted or applicable. It is the responsibility placed on somebody who did not act negligently. For example, consider selling a product that has defective problems. You did not intentionally make it defective but you are held liable for it, even though the seller did not intend to have it defective. Corporate liability is different because it is formed to limit the liability of shareholders. It determines the extent to how much they are liable for, unlike strict liability. The corporation can be punished or prosecuted if actions were done for benefits, results from negligence, or due to lack of responsible

Limited liability Company (LLC): Business’ owners are only subject to limited liability for company’s debts and actions. Owners will be only liable for their own mistakes or negligence that they may show in occasions.

assets of the business owner can be taken to pay off business debts since the two are not

The role of a liability and what it means to the business as a whole is different for every business. What remains the same is the definition. A liability is a company’s legal debts or obligations that arise during the course of business operations and is recorded on the balance sheet. Liabilities can include many things to a business, such as, loans, accounts payable, mortgages, accrued expenses, etc. All the named liability accounts are just fancy for any money or service that is owed to another party. There are two types of liabilities, current liability and long term liability. Current liability is debt payable within one year and long-term liability is debt payable over more than a year. Current liability includes

Anyone who is intended to enter the business world,should know that there are 5 types of business organisations that he or she needs to take under consideration.