Limited liability liability means that if a business is unable to pay its debts the owners of the company can only lose the money that they have paid for shares. Sole traders traders and partnerships have unlimited liability. If the `business cannot pay its debts, the owners have to pay them out of their own money. They may have to sell their house and other personal possessions possessions to pay the business’s creditors. The importance of limited liability is that people can put money into a firm by buying shares, without risking the loss of all their money if the company fails. If limited liability did not exist, people would be less willing to risk investing in firms. The word “Liability” in the passage is closest in meaning to ………
The word “possessions” in the passage is closest in meaning to