One disadvantage of a sole proprietorship as a form of business organization is that
A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
B)sole proprietorships are less efficient than corporations, because they are less specialized in production
C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm
E)owners of sole proprietorships generally have very little control over how they operate their businesses

Question

Quizplus · Accepted Answer

Owners of sole proprietorships have unlimited personal liability, meaning that their personal assets can be seized to pay off any debts or legal judgments against the business. This is a major disadvantage compared to other forms of business organization, such as corporations, where the owners' personal assets are generally protected.

One Disadvantage of a Sole Proprietorship as a Form of Business