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.

Question

Business

Josiah Hebert

4 February, 12:31

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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Jax Porter · 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