alleryStart learning →Home › Bihar Board Class 12 (Commerce) › Business Studies › Formation of a Company › Why is a sole proprietor at greater risk than a …
Why is a sole proprietor at greater risk than a shareholder of a corporation?
AHe pays higher dividends
BHe has no customers
CHe cannot hire any staff
DHe is personally liable
Answer & Solution
Correct answer: D. He is personally liable
Sole proprietors and general partners are personally liable for loans and legal judgments against the business.
Related questions
The company offering its shares in an IPO is known as what?What fee do underwriters keep from the proceeds of an IPO called?A listed company has 2 million shares outstanding at Rs 50 each. What is its market capitaMoney paid for newly issued shares in a primary offering goes to whom?Who typically underwrites an IPO?What is the process of a private firm offering shares to the public for the first time calA prospectus commonly includes which details about a company?Which document describes a security to potential buyers?