The owner of a sole proprietorship is personally liable for the debts of the business,whereas the stockholders of a corporation are not personally liable for the debts of the business.

Question

Quizplus · Accepted Answer

This is a key difference between a sole proprietorship and a corporation. As a sole proprietor, the owner is responsible for all debts and obligations of the business. In a corporation, the stockholders are not personally liable for the debts of the business due to the limited liability protection provided by the corporate structure.

The Owner of a Sole Proprietorship Is Personally Liable for the Debts