Question

In the event of a business failure, the creditors would look to the personal assets of any of the principals of

Answer 1

In the event of a business failure, creditors may look to the personal assets of the principals of the business, especially in the case of sole proprietorships where the owner and the business are considered one. This is due to the owner's unlimited liability.

Step-by-step explanation:

When a business fails, the creditors may turn to the personal assets of the principals of the business. This is particularly true for sole proprietorships, where the owner and the business are considered one and the same. In such cases, the owner has unlimited liability, meaning they are personally responsible for the debts and obligations of the company.