Lucy Zimmerman has organized her craft shop as a sole proprietorship.Her sister has warned her about ________,the legal principal holding Lucy responsible for paying off all of the debts of the business.

Question

Quizplus · Accepted Answer

Unlimited liability is the legal principle where the owner of a business is held personally responsible for paying off all the debts of the business. As Lucy has organized her craft shop as a sole proprietorship, there is no legal distinction between her personal and business assets. Therefore, any debts incurred by the business will be the responsibility of Lucy to pay off, making unlimited liability a potential risk for her.

Lucy Zimmerman Has Organized Her Craft Shop as a Sole