What is the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes?
A) No access to capital
B) Taxing complications
C) Unlimited liability
D) Ease of start-up
E) Lack of secrecy

Question

Quizplus · Accepted Answer

The primary disadvantage of both a sole proprietorship and a partnership is unlimited liability, where the owners are personally responsible for all debts and legal issues of the business. In contrast, a corporation provides limited liability protection to its owners, meaning they are only responsible for the amount of their investment in the company. Therefore, C is the correct answer.

What Is the Primary Disadvantage of Both a Sole Proprietorship