Understanding Business
11th Edition
ISBN: 9780078023163
Author: William G Nickels, James McHugh, Susan McHugh
Publisher: McGraw-Hill Education
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Question
Chapter 5.1, Problem 2TP
Summary Introduction
To determine: The reason for which unlimited liability is considered to be the major drawback to sole proprietorship.
Introduction:
When the business is managed and owned by a person single handedly, it is known as sole proprietorship.
The legal obligations of the sole proprietors to pay for all the debts of the company even if it takes to pay it from the personal assets of the proprietor, is known as the unlimited liability.
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Chapter 5 Solutions
Understanding Business
Ch. 5.1 - Prob. 5.1AQCh. 5.1 - Prob. 5.1BQCh. 5.1 - Prob. 1TPCh. 5.1 - Prob. 2TPCh. 5.2 - Prob. 5.2AQCh. 5.2 - Prob. 1MEDCh. 5.2 - Prob. 3TPCh. 5.2 - Prob. 4TPCh. 5.3 - Prob. 5.3AQCh. 5.3 - Prob. 5.3BQ
Ch. 5.3 - Prob. 5TPCh. 5.3 - Prob. 6TPCh. 5.3 - Prob. 7TPCh. 5.3 - Prob. 8TPCh. 5.4 - Prob. 5.4AQCh. 5.5 - Prob. 5.5AQCh. 5.5 - Prob. 5.5BQCh. 5.5 - Prob. 5.5CQCh. 5.6 - Prob. 9TPCh. 5.6 - Prob. 10TPCh. 5.6 - Prob. 11TPCh. 5 - Prob. 1CTCh. 5 - Prob. 2CTCh. 5 - Prob. 3CTCh. 5 - Prob. 4CTCh. 5 - Prob. 1DWSCh. 5 - Prob. 2DWSCh. 5 - Prob. 3DWSCh. 5 - Prob. 4DWSCh. 5 - Prob. 5DWSCh. 5 - Prob. 1TITCh. 5 - Prob. 2TITCh. 5 - Prob. 1VCCh. 5 - Prob. 2VCCh. 5 - Prob. 3VC
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Similar questions
- What are the advantage and disadvantage of sole proprietorship?arrow_forwardHow does limited liability impact the decision-making process and risk management strategies of a company?arrow_forwardhow is a limited partnership transferred or sold and how the ownership interests would be handled?arrow_forward
- What are the main components of a business partnership agreement?arrow_forwardSuppose a partnership is set up and operated without a formal partnership agreement. What problems might arise? Explainarrow_forwardIf a CEO has an opportunity to merge with or acquire another company and is reasonably certain that the transaction will benefit shareholders, is the CEO obligated to pursue the deal? Why or why not?arrow_forward
- What are some common challenges faced by sole proprietors, and how can they overcome them?arrow_forwardWhy would someone put up a sole proprietorship? All options are correct To take control of all the aspects of the business To enjoy all profits that can be made from the business To make all decisions regarding the businessarrow_forwardWhat is a partnership? Outline the legal issues involved in the formation of a partnership. In your answer, discuss the issues that partners should consider in drafting the partnership agreement.arrow_forward
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