Practice question · Fill in the blanks
Complete the statement about legal forms.
A sole proprietorship exposes the owner to ______ liability, while an S.L. caps losses at the capital ______.
Word bank: unlimited · contributed · limited · borrowed
Hints
- The contrast is between exposure capped at the contribution and exposure without a cap.
- One form reaches personal assets; the other stops at the company.
Show the answer
A sole proprietorship exposes the owner to unlimited liability, while an S.L. caps losses at the capital contributed.
Why
Unlimited liability reaches personal assets; in an S.L. only the contributed capital is at risk.
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