Darrell is sure he would like to be a sole proprietor of his business, but he knows he should weigh the pros and cons of that decision. What would be a disadvantage of sole proprietorship for Darrell?

Question

(1 point)
Responses

He would be the only owner and make all the decisions.

He would be the only owner and make all the decisions.

He would be liable or legally responsible for all debts.

He would be liable or legally responsible for all debts.

He would be subject to very few government regulations.

He would be subject to very few government regulations.

He would be eligible to receive all after-tax income earned in the business.

He would be eligible to receive all after-tax income earned in the business.

Answer 1

The correct response regarding a disadvantage of sole proprietorship for Darrell is:

He would be liable or legally responsible for all debts.

In a sole proprietorship, the owner has unlimited personal liability, meaning that if the business incurs debts or legal issues, Darrell's personal assets could be at risk.