Sole Proprietorship Liability

A sole proprietorship is a business owned and operated by one person. In terms of liability, this means that the owner is personally responsible for all debts and obligations of the business. If the business faces financial issues, such as unpaid bills or lawsuits, the owner’s personal assets (like savings or property) can be at risk. Unlike corporations, which provide limited liability protection, sole proprietors do not have that shield, making it crucial for them to manage risks carefully and consider insurance options to safeguard their personal assets.