Question

What does unlimited liability mean for a sole proprietor?

Options

• Only the business assets are at risk.

• Both business and personal assets can be used to repay debts.

• Profits are always limited.

• The government pays for the business loans.

Answer 1

Both business and personal assets can be used to repay debts.

Explanation:

Unlimited liability makes the owner responsible for all debts, even for using personal property.