What is unlimited liability?
In GCSE Business, unlimited liability is defined as the legal responsibility of sole traders and business partners for all debts incurred by their business.
Sole traders and partners are not considered to be separate legal entities from the business they own. This means they are personally responsible for any and all of its debts. If their business runs into financial difficulties, they may need to use their own assets to pay these debts. This could mean a small business owner loses their savings or even their home if debts are significant.
Unlimited Liability Revision Resources to Ace Your Exams
Save My Exams has a great range of resources to explore the topic of unlimited liability further.
Read our GCSE Business liability revision notes or test your knowledge of business ownership, including unlimited liability, with our exam questions to improve your grades.
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