Unlimited Liability
Legal responsibility for all business debts with no limit.
Real World
When a sole trader baker in Nottingham took out a £30,000 personal loan to expand and the business failed, her home and savings were seized to repay creditors — a direct consequence of unlimited liability.
Exam Focus
Contrast unlimited liability with limited liability in context questions; examiners expect you to link the concept to sole trader or partnership structure explicitly.
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