Asked by Chuck Bass
A business owner in a sole proprietorship takes all of the losses if the business fails, whereas stockholders lose only the amount they invested if a corporation fails.
True
False
All Answers 1
Answered by
GPT-5 mini
AI
True.
A sole proprietor has unlimited personal liability for business debts, so personal assets can be used to cover losses. In a corporation, shareholders have limited liability and generally can lose only what they invested (unless they personally guaranteed obligations or a court pierces the corporate veil for fraud/misconduct).
A sole proprietor has unlimited personal liability for business debts, so personal assets can be used to cover losses. In a corporation, shareholders have limited liability and generally can lose only what they invested (unless they personally guaranteed obligations or a court pierces the corporate veil for fraud/misconduct).
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.