Manuel owns a mobile pet-grooming business. Last year as he was grooming a poodle Manuel accidentally dropped the clippers, causing a gash on the poodle's back. The poodle's owner then sued Manuel for the veterinarian bills. The court determined that Manuel owed the poodle's owner $2,000. Which of the following describes the likely form of Manuel's pet-grooming business and his liability?
A) a sole proprietorship, which means he has unlimited liability
B) a corporation, which means he has unlimited liability
C) a partnership, which means he has limited liability and paid only a portion of the veterinarian bills
D) a corporation, which means he has limited liability

Question

Quizplus · Accepted Answer

Manuel's mobile pet-grooming business is likely a sole proprietorship since it is owned by one individual. As a sole proprietor, Manuel has unlimited liability, which means he is personally responsible for all debts and legal obligations of the business. Therefore, he will be responsible for paying the full $2,000 in veterinarian bills.

Manuel Owns a Mobile Pet-Grooming Business