Owners of sole proprietorships are personally responsible for any debts incurred by their business.

Question

Quizplus · Accepted Answer

This is one of the major disadvantages of having a sole proprietorship. As the owner of the business and the business itself are not considered separate entities, any debts incurred by the business are the responsibility of the owner. This means that the owner's personal assets could be at risk if the business is unable to pay its debts.

Owners of Sole Proprietorships Are Personally Responsible for Any Debts