Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 8 - No. 1)
What does the term 'unlimited liability' mean in the context of partnerships?
Partners are only liable for their initial investment.
Partners are only liable for their share of the profits.
Partners are personally liable for all business debts, even if it exceeds their investment.
Partners' personal assets are protected from business debts.
Explanation
Unlimited liability means partners are personally liable for all business debts, even if it exceeds their investment.
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