Question

One of the major disadvantages of a sole proprietorship is the: Group of answer choices Possibility of disagreements between owners. Unlimited liability the owner has for the debts of the firm. Fact that any income earned by this type of business is taxed twice. High cost of starting or ending the company.

Answer 1

One of the disadvantages of a sole proprietorship is the owner's unlimited liability for the company's debts.

What is a sole proprietorship?

It is a business structure where there is no legal personality, ie the individual is responsible for the risks inherent in the business, profits and losses. It is an easier business to start or end, where there is no legal protection or registration.

Therefore, because of the ease of startup, sole proprietorship is an advantageous way of starting a business, and a disadvantage is the unlimited liability of the owner in the business.

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