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Homework answers / question archive / A major disadvantage of a sole proprietorship is the fact that: A) it is expensive to establish B) the owner has unlimited personal liability C) it is easy to finance growth D) the owner pays taxes on all the income
A major disadvantage of a sole proprietorship is the fact that:
A) it is expensive to establish
B) the owner has unlimited personal liability
C) it is easy to finance growth
D) the owner pays taxes on all the income
Answer:B) the owner has unlimited personal liability.
The major problem that is usually associated with the sole trader as one of the major business organizations is that the business owner is usually liable for the losses that the business may incur. As a result, the owner will be liable for those losses with the possibility of losing some of the personal assets to pay these debts.
