Question

Why there is unlimited liability for the sole proprietorship and limited liability for the joint stock company?

Justify your answer with reasons

Answer 1

Sole proprietorship and joint-stock company.

Explanation:

• Sole Proprietorship is the business which is based and run by a single person.
• It is more like a private firm or business.
• Joint Stock Company is the business which consist of many channels and people.
• The decision for the business is taken by the committee.
• There are more liabilities for the Sole Proprietorship because of the business and the Proprietorship they are the same.
• In the Joint-stock company the business and the Proprietorship are different so they have fewer chances of liability as decisions were taken by different members.

Learn more about the Sole proprietorship and joint-stock company.

Differences between sole proprietorship and joint stock company

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Answer 2

A proprietorship is a single business entity like one person company and joint stocks are managed and maintained by the more than one partner entities.

Explanation:

• In a sole proprietorship, a single person is responsible or running the business, and is entitled to all the profits thus possess unlimited rights and obligations that is he or she has unlimited liabilities and as theses business are easiest to start and run they are easier to operate and maintain.  

• As compared to a joint-stock company is jointly operated by two or more business entities. They share the assets and liabilities and the shares or stocks are transferable. They are separate legal entities and have other legal existence other than the owner. Hence have limited liabilities.

Learn more about the there is unlimited liability for the sole proprietorship and limited liability for the joint stock company.

• brainly.in/question/13577712 answered by Shaizakincsem.