Sole Proprietorship Personal Liability Issues

What is a key characteristic of a sole proprietorship in terms of liability?

• The owner has limited liability protection.

• The owner is personally liable for business debts.

• The business can issue stocks to raise capital.

• The business is a separate legal entity from the owner.

How does having employees affect the liability of a sole proprietor?

• Employees' actions do not impact the owner's liability.

• Employees can increase the owner's personal liability.

• Employees provide liability protection to the owner.

• Employees are solely responsible for their actions.

What is a potential risk for a sole proprietor with employees?

• Reduced operational costs.

• Enhanced business reputation.

• Loss of personal assets due to employee actions.

• Increased business profits.

What is considered the largest disadvantage of a sole proprietorship?

• Limited access to capital.

• Complex tax filing requirements.

• Risk to personal assets from business liabilities.

• Difficulty in hiring employees.

Which of the following is NOT a consequence of sole proprietorship liability?

• Owner is responsible for business debts.

• Owner's personal assets are at risk.

• Owner has limited liability protection.

• Owner is liable for employee actions.