Which ethical norm is consistent with a person who chooses a LLC over a sole proprietorship?

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Business

Jason Dawson

26 October, 10:10

Which ethical norm is consistent with a person who chooses a LLC over a sole proprietorship?

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Rayne Martinez · Answer 1

The limited liability, a person’s financial liability is limited to a fixed sum. Mostly, the liability will be the value of a person’s investment in a company.

IF a company with limited liability is sued, then the claimants can only sue the company. The claimants cannot sue its owner or investor.

The ethical norm that is consistent with a person who chooses a limited liability such as sole proprietorship.

It is like a shareholder in a limited company. The shareholder is not personally liable for any of the debts of the company. The same is applicable for the partners or investors of a limited liability company or partnership company.

But, the sole proprietors and partners in general partnerships are surely liable for all the debts of the business. It means that they have limited liability.