GENERAL KNOWLEDGE

Detailed explanation-1: -In the sole proprietorship business, the sole owner has unlimited liability. In this case, the owner is himself liable to pay all the liabilities. If he takes a loan for its business then he will be liable for all the debts.

Detailed explanation-2: -Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk. May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.

Detailed explanation-3: -A sole proprietorship is a non-registered, unincorporated business run solely by one individual proprietor with no distinction between the business and the owner. The owner of a sole proprietorship is entitled to all profits but is also responsible for the business’s debts, losses, and liabilities.

Detailed explanation-4: -Sole proprietorships do not have the protection of limited liability. Instead, the sole owner has unlimited liability. This means that the sole owner is personally liable for the debts and expenses of the business. If the business is sued, the sole owner risks losing their personal assets.

Detailed explanation-5: -The owner carries the financial responsibility for all debts and/or losses suffered by the business, to the extent of using personal or other assets to discharge any outstanding liabilities. Thus the owner of a sole proprietorship may be forced to use his/her personal holdings, such as his/her car, to pay the debts.