Choice of ownership determines the degree to which each owner has personal liability for the firm's debts and the sources of funds available to the firm to finance future expansion.

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Business

Tristen Garrett

11 August, 20:56

Choice of ownership determines the degree to which each owner has personal liability for the firm's debts and the sources of funds available to the firm to finance future expansion.

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Scott Klein · Answer 1

That statement is true.

Whenever a profit or liability created by the company, it will spread accordingly according to the percentage owned by the shareholders.

For example, if Andy has 30 % ownership and Amy has 70% ownership and the company generate $1000 of debt, Andy will be liable for $300 of it and amy will be liable for $700 of it