Question

In a sole proprietor ownership, if business assets are not enough to pay business debts, then personal assets, such as the sole proprietor's house, personal investments, and retirement plans can be used to pay the debt. This is called ________.

Answer 1

unlimited liability

Step-by-step explanation:

unlimited liability

unlimited liability means that if company assets are not sufficient to pay business liabilities, personal property such as the sole owner's house, stock holdings or pension plans may be used to pay off the balance.

If your type of company has the power for someone to take legal action against you for errors on your part, you might not want to perform as a sole proprietorship.

A sole owner is solely responsible for all of the company's debts and liabilities.