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Question
The liability of sole proprietor is
The liability of sole proprietor is
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Solution
The correct option is C Limited to the extent of the value of his business assets and all his private estates
Sole proprietors have
unlimited liability. This implies that the
owner is personally responsible for
payment of debts in case the assets of
the business are not sufficient to meet
all the debts. As such the owner’s
personal possessions such as his/her
personal car and other assets could be
sold for repaying the debt.
Sole proprietors have unlimited liability. This implies that the owner is personally responsible for payment of debts in case the assets of the business are not sufficient to meet all the debts. As such the owner’s personal possessions such as his/her personal car and other assets could be sold for repaying the debt.
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