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Banks and risk Typeit
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The main types of business that have unlimited liability are sole and partnerships.*
This means that in the event of the business going bust or being sued the owner and the business have one legal identity.
This means that the owner may be liable to repay business debts from their own , or may need to sell their house or car to pay the debts.
As a business grows it may decide that it would like the protection of liability and so will become a private limited . This is known as for short. The "private" refers to who can buy shares and the "limited" refers to the limited liability; for example, Eddie Stobart, the delivery company, is still an Ltd.
The business may grow much larger and need to grow and to expand and so will become a limited company, or for short. Famous plcs are Sainsbury's, British Airways, BT and Rolls Royce. The benefit of being a plc is the business will have the protection of limited liability and will be able to sell shares to the public.
* There are limited liability partnerships LLP, but these are outside the scope of this A Level.