Liability Exposure Within Multiple Businesses

| The partners are jointly and severally liable for business debts and obligations. The partners are held personally responsible for the business and may be sued personally for liability. Partners’ personal assets are subject to lawsuit(s) made against the business. Lack of continuity; death of a partner may end the partnership/business if a buy/sell agreement is not in place. Disagreements may be difficult to resolve.

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.

Liability: The owner/operator of a Sole Proprietorship is subject to full and unlimited financial liability for the business. The owner and the company are legally the same entity. The company’s assets are legally the same as the owner’s personal assets.

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

A limited liability company protects each partner from personal liability for certain obligations of the company. An important difference from other partnerships is that each partner is liable for the debts and obligations of the partners. With limited liability Company, each state has its own laws governing partners for these vessels. Some states allow only certain professions, such as lawyers and accountants to form LLP. Some states only provide protection from liability for negligence claims, leaving personally responsible for other types of requests partner. For tax purposes, profits are divided equally between the partners and the partnership is not taxed separately.

Liability- The general partner would be liable for all unlimited responsibility on all tasks and debt, while the limited partner will not loss more than their investment.

Many believe that liability is a biggest issue in a general partnership than in a sole proprietorship. The owners of the company are still fully liable for any debts the company may accrue as well as the liability for any lawsuits that may be brought against the company. However, the bigger issue in a partnership is that now each partner can be liable for the other partner’s actions. If one partner is sued for malpractice, the other partner may suffer because of it.

a partners that might end or dissolve partnership. One of the main drawbacks of a

LIABILITY – The general partner has unlimited liability, while the limited partner is typically liable for the investment that he contributes.

Partnership liability tort can take place when a partner or all partners acting on partnership business causes injury to a third person. Cause of this tort could be a negligent act, a breach of trust, breach of fiduciary duty, defamation, fraud, or another intentional tort (Cheeseman, 2010, p. 538). Under the Uniform Partnership Act, partners are jointly and severally liable for torts and breaches of trust (UPA, 2010). This is true even if the co-partner(s) did not participate in the act. The joint and severally liable tort permits a third party to sue one or more of the partners

When it comes to partnerships Alex, Bill, Carl, and Devon will have two options- a general partnership or a limited partnership. Partnerships are beginning to be a business form of the past. Once upon a time, partnerships were “the default form of business and provided the benefit of pass-through taxation, but lacked the important feature of limited liability” (Chrisman, 2010, p. 465). In a general partnership, each partner associated with the entity will be held liable for their own business decisions as well as

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

“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 All liabilities are the responsibility of each partner. In the event of litigation, any creditors can go after the personal assets of each partner to recover any debt owed. But since liability is spread out between the owners, one may feel less risk is being taken. 2. Income Taxes General partnership may also benefit from pass-through taxation, meaning the partners are taxed like sole proprietors. Business income is reported on the personal tax filing while business losses can be deducted to reduce personal tax liability. The partnership itself is not subject to federal income tax. However the partnership needs to file an information return utilizing the IRS Form 1065. 3. Longevity or continuity of the organization Once the partnership agreement is fulfilled, the general partnership may dissolve. A buy/sell agreement may be included in the articles of the partnership to allow the

Provisions such as limited liability on part of auditors, increased interest for shareholders, etc. are part of the Companies Act of 2006 in the UK. This Act includes limited liability by contract with regard to such an amount which is deemed reasonable and fair in all circumstances (Coffee, 2007). In the last few years, changes have been brought in terms of the legal regime in the UK’s governance system. For instance, since 1989, firms in the UK have been able to incorporate, in that the firms can form limited liability partnerships, wherein they can protect all the partners from any kind of personal bankruptcy unless the partners were responsible personally in any kind of faulty opinion in terms of audit. Nonetheless, firms in the UK have continued to choose abandoning the joint responsibility option for lucrative limited liability regime (Hicks, 2008). The firms in the UK have used the case of Arthur Anderson LLP to modify and reform joint and several liability based on two arguments and these were – collapse of a major firm under the pressure of aforementioned liability may leave the market concentrated; and liability risk can be considered as a barrier in terms of smaller firms who attempt to enter a concentrated market. Within the context of limited liability, there are more unique kinds of liabilities which are deemed to be missing from the Act