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Which of the following would generally have unlimited liability? 
  • a)
    A limited partner in a partnership 
  • b)
    A shareholder in a corporation 
  • c)
    The owner of a sole proprietorship
  • d)
    A member in a limited liability company (LLC) 
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Which of the following would generally have unlimited liability?a)A li...
Explanation:


  • Sole Proprietorship: The owner of a sole proprietorship has unlimited liability. This means that if the business incurs debts or legal obligations, the owner is personally responsible for them. Creditors can go after the owner's personal assets to settle business debts.

  • Partnership: In a general partnership, partners also have unlimited liability. Each partner is personally liable for the debts and obligations of the partnership.

  • Corporation: Shareholders in a corporation have limited liability. This means that their liability is limited to the amount they have invested in the company.

  • Limited Liability Company (LLC): Members of an LLC also have limited liability. Their personal assets are protected from the debts and obligations of the company.


Therefore, the correct answer is C: The owner of a sole proprietorship generally has unlimited liability.
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Most Upvoted Answer
Which of the following would generally have unlimited liability?a)A li...
The reason business owners of sole proprietorships and partnerships are subject to unlimited liability is because both business structures do not create a separate legal entity. The owners and the business are one entity.
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Which of the following would generally have unlimited liability?a)A limited partner in a partnershipb)A shareholder in a corporationc)The owner of a sole proprietorshipd)A member in a limited liability company (LLC)Correct answer is option 'C'. Can you explain this answer?
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