Question

Alejandro recently established a maintenance company as a sole proprietorship. He was hired to repair the air conditioner on a residential property, but he accidentally caused damage to the air conditioning unit valued at over $6,000. Alejandro has only had the business for a week and has paid about $200 for tools. Which of the following is true?

1. Alejandro is liable for all of the damages since the owner of a sole proprietorship does not have limited liability.

2. Alejandro is liable for $200 since the owner of a sole proprietorship does not have limited liability.

3. Alejandro is liable for $200 since the owner of a sole proprietorship has limited liability.

4. Alejandro is liable for all of the damages since the owner of a sole proprietorship has limited liability.

Answer 1

Answer:

1. Alejandro is liable for all of the damages since the owner of a sole proprietorship does not have limited liability.

Answer 2

Alejandro is liable for all of the damages since the owner of a sole proprietorship does not have limited liability.

What is sole proprietorship?

Sole proprietorship is a type of business entity owed by a single person. This means the the owner bears the profit and losses all alone.

With regards to the above, Alejandro will bear the losses because he was registered as a sole proprietorship; meaning that he must pay for any loss incur doing the course of carrying out his duties.

Hence, Alejandro is liable for all of the damages since the owner of a sole proprietorship does not have limited liability.

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