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What is unlimited liability?
Individual proprietorship is the simplest way of starting a business. You are self-employed and fully responsible for all the aspects of the management of your business.
In this form of organization the owner himself is responsible for success or failure of his business. Any line of business is open to an owner.
Although this form of small business has its advantages, it has certain drawbacks, too. In the first place the single owner is seldom able to invest as much capital as can be invested by a partnership or a corporation. If single owners are able to invest large amounts of capital, they run great risk of losing it all because they are personally liable for all the debts of their businesses. This is called unlimited liability.
It is liability when you are personally liable for your businesses.
It is liability when you are personally liable for success and failure of your businesses.
It is liability when you are personally liable for yourself.
It is liability when you are personally liable for all the debts of your businesses.