The Business Of Chiropractic (TBOC) Practice Test

What is the personal liability of a sole proprietor?

Unlimited Limited only to the investment in the business Limited to liabilities incurred by that partner and excluding liabilities incurred by other partners Limited to liabilities ratified by the partner

Correct Answer:

Unlimited

Explanation:

In a sole proprietorship there is no separation between the owner and the business. The owner is personally responsible for all business debts and obligations, so personal assets can be used to satisfy those liabilities. This is unlimited personal liability—the owner bears no cap tied to the amount invested or to business assets alone. The other options describe liability protections that apply to different business structures or to partnerships, not to a sole proprietor. Because there is no liability shield, personal asset protection hinges on risk management and insurance.

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