What is the chief disadvantage of the sole proprietorship as a form of business organisation when compared to the corporate form?
A)Sole proprietorships are subject to double taxation of profits
B)The cost of formation
C)Inadequate profit sharing
D)Owners have unlimited liability

Question

Quizplus · Accepted Answer

The chief disadvantage of sole proprietorship is that the owner has unlimited liability, which means he or she is personally responsible for all debts and legal liabilities of the business. This is not the case with the corporate form, where the owners have limited liability and are not personally responsible for the company's debts and legal liabilities.

What Is the Chief Disadvantage of the Sole Proprietorship as a Form