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Forms of Business Organization
Question
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Explain whether the liability of a sole proprietorship is limited to the extent of his share in business.

Answer

  • The liability of a sole proprietorship is not limited to the extent of his share in business.
  • The liability of sole proprietor is unlimited.
  • The sole proprietor is personally liable for all business obligations. His own funds can be used if the business profits are insufficient to meet the losses of business.

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Some More Questions From Forms of Business Organization Chapter

What do you understand by a Private Company?

What do you understand by a Public Company?

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Write a short note on 'implied agency', one of the important characteristics of partnership and also true test of partnership.

Would you say that the sole proprietorship involves a lengthy and expensive procedure for its registration?

Explain whether the liability of a sole proprietorship is limited to the extent of his share in business.

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