Who is liable for the debts of a business?

In Hawaii, the person or people responsible for business debts is determined by the type of business structure. A sole proprietorship is a business owned and operated by one individual. In this type of business, the owner is personally liable for all debts and obligations. This means that if the business can’t satisfy its debts, the owner could be held responsible and even lose personal assets. In a partnership, all of the partners are jointly and individually responsible for the debts and obligations of the business. This means that each partner is legally liable for any debts or contracts their business enters into. A limited liability company (LLC) is a form of business that limits the owners’ liability for the actions and debts of the business. This means that the members of the LLC are not personally responsible for the debts or obligations of the business. Finally, a corporation is a business structure where the owners or shareholders are not personally responsible for the debts or obligations of the business. In a corporation, the shareholders’ liability is limited to the amount of money they have invested in the corporation. Regardless of the type of business structure, creditors and other third parties may look to the owners and operators of the business as liable parties if the business is unable to satisfy its debts.

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Who is liable for the debts of a business?

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