Question

Which of the following statements about the Sole Proprietorship business organization is NOT true?

a. The sole proprietor is responsible for all debts and obligations related to the business
b. This form of business organization has the lowest amount of regulatory burden
c. Creditors cannot make a claim against your personal assets to pay off a debt
d. a & c

Answer 1

The incorrect statement is that creditors cannot claim against personal assets in a Sole Proprietorship, as the owner has unlimited liability for business debts.

Step-by-step explanation:

The statement about the Sole Proprietorship business organization that is NOT true is: c. Creditors cannot make a claim against your personal assets to pay off a debt. It is a fundamental characteristic of sole proprietorships that the owner bears unlimited liability for the debts and obligations of the business. This means that if a sole proprietorship fails or incurs debt, the owner's personal assets, such as a house or car, can be used to satisfy creditors. Sole proprietorships have the lowest amount of regulatory burden and allow proprietors to be solely responsible for all decisions, profits, and liabilities associated with their business.