A sole proprietor is subject to unlimited personal liability for the debts of the business.

Question

Quizplus · Accepted Answer

As a sole proprietor, there is no distinction between personal and business assets, and therefore the owner is personally responsible for all financial obligations and debts incurred by the business. This means that if the business is unable to pay its debts, the owner's personal assets may be seized to satisfy those obligations.

A Sole Proprietor Is Subject to Unlimited Personal Liability for the Debts