Concept:A sole proprietorship is a business owned by one person, and its main drawback is that the owner bears all financial risks personally.
Explanation:In a sole proprietorship, there is no legal separation between the owner and the business.
If the business incurs debts or suffers losses, the owner is personally responsible for paying them.
This means the owner may have to sell personal property or use personal savings to settle business debts.
This feature is called unlimited liability.
It is a major disadvantage because the owner’s personal assets are not protected.
Unlike a limited liability company, where owners lose only the amount they invested, a sole proprietor can lose much more.
Therefore, among the options, the correct disadvantage is unlimited liability.
Answer:C. unlimited liability