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Is liability of sole proprietor limited or not? |
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Answer» Unlimited liability The sole-proprietor has unlimited liability. It means that personal property of owner can also be use to pay business liabilities,i f business property is not sufficient to meet the debts. So the owner is personally liable to pay business debts if these are not paid by business assets. Since there is no separation between the owner and the business, the\xa0liability\xa0of the owner is also unlimited. So if the business is unable to meet its own liabilities, it will fall upon the proprietor to pay them. All of his personal assets (like his car, house, other properties etc) may have to be sold to meet the liabilities of the business. Liability of sole proprietor is unlimited. |
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