2.1.5+Limited+and+unlimited+liability

= Syllabus Content  = = = = 2.1.5 Limited and unlimited liability = = Understand the role and function of entrepreneurship = = • Understand the concepts of risk and ownership = = • Understand the concept of limited liability =

Note that this was dealt with when we looked at legal structures in 2.1.2. Remember though that in large businesses the two functions of entrepreneurship- management and risk taking are separated. For example in PLCs you would not say that shareholders are necessarily entrepreneurs as whilst they own the company and take risks with their investments they do not directly manage and control the business. Moreover their risk is limited by limited liability. The purest form of entrepreneurship is in small businesses as here the owner is also the day to day manger of the business. They are also risky everything as they have unlimited liability.