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28 February, 07:01

What is the financial impact on owners when a corporation is sued and loses its case?

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  1. 28 February, 07:21
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    The landlords of the company have no effect, as their corporate assets can never be prosecuted. So, private assets are secure and also not impacted.

    Explanation:

    Because of lower consumer spending or a shrinking in the market cycle, businesses facing a decreased market share might be forced to reduce operating performance.

    This decrease can include laying off workers, selling equipment or properties and closing business operations underperforming.

    The corporation can become bankrupt with repeated business losses. Although many businesses attempt to prevent bankruptcy by selling the company to a rival or by obtaining extra funding to continue their activities, fails may be the final option.

    Based on how the corporation is managed, the owner of a small business may request that it declare personal bankruptcy.
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