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Although the sole proprietor's entire personal fortune is at risk, insurance may offset that risk.
Sole Proprietor
A type of business entity owned and operated by a single individual, where there is no legal distinction between the owner and the business.
Personal Fortune
A person's net worth comprised of assets, cash, and investments minus any liabilities.
Insurance
A contractual agreement where one party agrees to compensate another party for specific losses or damages in exchange for a premium.
- Gain an understanding of the notion of boundless financial responsibility for sole proprietors and partners.
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Learning Objectives
- Gain an understanding of the notion of boundless financial responsibility for sole proprietors and partners.
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