If a Sole Proprietorship Fails to Meet Its Obligations to Its

question 73

Multiple Choice

If a sole proprietorship fails to meet its obligations to its creditors,then:

• A) the creditors have a legal right to take possession of the personal assets of the owner(s).
• B) the creditors are restricted in what rights they have over the personal assets of the owner(s).
• C) the liability of the sole proprietorship is restricted to the value of the original issue price.
• D) the rights of the creditors are restricted to the financial assets of the owner(s).

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Definitions:

Personal Insolvency

A financial condition where an individual is unable to meet their debt obligations as they come due.