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      Question

      The liability of a sole proprietor

      is:
      A Decided by the sole proprietor Correct Answer Incorrect Answer
      B Unlimited Correct Answer Incorrect Answer
      C Limited Correct Answer Incorrect Answer
      D Undecided Correct Answer Incorrect Answer

      Solution

      In a sole proprietorship, the liability of the sole proprietor is unlimited. This means that the owner is personally responsible for all the debts and obligations of the business. In the event of business losses or liabilities exceeding the business assets, the personal assets of the sole proprietor can be used to settle the business debts.

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