Unincorporated Businesses and Limited Companies
- A business may be unincorporated or incorporated. These terms are closely linked to the concepts of limited liability and unlimited liability
-
An unincorporated business does not have a separate legal identity from its owner(s)
- If the business is sued the owner is responsible and may need to cover legal costs with their own money
- Unincorporated business types include sole traders and partnerships
- An incorporated business is called a company and has a separate legal identity from its owner(s)
- If the business goes bankrupt its owners (shareholders) cannot be held responsible for debts and only lose the money they initially invested
- Unincorporated businesses include private limited companies (Ltd) and public limited companies (PLC)
-
A Comparison of Unincorporated and Incorporated Companies
|
|
|
|
|
|
|
|