Asked by Ethan Scofield on May 25, 2024
Verified
Brian is the sole proprietor of Long Voyage Software,which generates maps for wilderness trips.He started the business with an initial investment of $80,000.A faulty map caused one customer to get hopelessly lost.After her rescue and recuperation,she sued Long Voyage for $5,000,000.Which of the following is true?
A) The customer can be awarded only $80,000-what the firm has available to pay.
B) The customer can be awarded $5,000,000 but can get only $80,000.
C) The customer can be awarded $5,000,000,but Brian personally won't have to pay more than $80,000.
D) If $5,000,000 is awarded,Brian will have to pay none of it.
E) If $5,000,000 is awarded,Brian is personally responsible for paying all of it.
Sole Proprietor
A business owned and operated by a single individual, where the owner is personally responsible for the business's debts.
Initial Investment
The amount of money used to start a new business venture, project, or investment.
- Understand the legal and financial liabilities in different business structures.
Verified Answer
BK
bhuda kannadiMay 27, 2024
Final Answer :
E
Explanation :
As a sole proprietor, Brian is personally liable for all debts and obligations of the business. This means if Long Voyage Software is sued for $5,000,000 and loses, Brian is personally responsible for paying the entire amount, not just the initial investment of $80,000.
Learning Objectives
- Understand the legal and financial liabilities in different business structures.
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