Final answer:
A sole proprietor owning a business has unlimited liability, meaning personal assets are at legal risk if the business incurs losses. This contrasts with corporations or limited liability partnerships that offer protection to personal assets. The option (C) is correct.
Step-by-step explanation:
When a sole proprietor owner is personally responsible for losses at the business, it means that the owner's possessions are at legal risk. In the case of debts, lawsuits, or bankruptcy, the owner may have to use personal assets to settle the business obligations.
This is due to the unlimited liability that is a characteristic of sole proprietorships. In contrast, a corporation provides limited liability, protecting personal assets, and a limited liability partnership limits the owner's liability to the amount they've invested in the company. Therefore, option (C) is correct.