The liability of a sole proprietor is:a) Limited to the capital investedb) Limited to the extent of his sharec) Unlimitedd) Limited to the profits

The liability of a sole proprietor is:

a) Limited to the capital invested b) Limited to the extent of his share c) Unlimited d) Limited to the profits

Step-by-step analysis:

1. Understanding Sole Proprietorship: A sole proprietorship is a type of business entity that is owned and run by one individual, with no distinction between the owner and the business.

2. Liability in Sole Proprietorship: In a sole proprietorship, the owner is personally responsible for all the debts and obligations of the business. This means that if the business incurs debt or is sued, the owner's personal assets (such as their home, car, and personal savings) can be used to satisfy business debts.

3. Evaluating the Options:

   • Option a) Limited to the capital invested: This implies that the owner's liability is restricted to the amount of money they have put into the business. This is not true for a sole proprietorship.
   • Option b) Limited to the extent of his share: This suggests that the owner's liability is limited to their share in the business. In a sole proprietorship, there is no concept of shares as the business is owned entirely by one person.
   • Option c) Unlimited: This means that the owner is personally liable for all the debts and obligations of the business without any limit. This is true for a sole proprietorship.
   • Option d) Limited to the profits: This implies that the owner's liability is restricted to the profits generated by the business. This is not true for a sole proprietorship.

4. Conclusion: Based on the analysis, the correct answer is:

c) Unlimited