The most critical disadvantage of the sole proprietorship is:
A)unlimited personal liability.
B)limited access to capital.
C)lack of continuity.
D)limited skills and capacities of the owner.

Question

Quizplus · Accepted Answer

The lack of legal structure in a sole proprietorship means that the owner has unlimited personal liability for business debts and obligations. This means that personal assets of the owner, such as their home and savings, could be used to pay off business debts if the business is unable to do so. This is a significant disadvantage for the owner and could result in financial devastation if the business fails.

The Most Critical Disadvantage of the Sole Proprietorship Is