SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/biz-sole-prop-personal-liability

Who is responsible for a sole proprietorship's business debts?

The owner, personally, because the business is not a separate entity.

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  1. Only the business, never the owner
  2. The owner, personally ✔
  3. The state that issued the license

Why: A sole proprietorship is not a separate legal entity. The owner's personal assets and the business's debts are tied together, so the owner can be held personally liable.

Huh, didn't know that: A sole proprietor may still use a trade name, but that does not create a separate business entity.

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References

Answer: The owner, personally. A sole proprietorship is not a separate legal entity. The owner's personal assets and the business's debts are tied together, so the owner can be held personally liable.

  1. SBA: Choose a business structure www.sba.gov/business-guide/launch-your-business/choose-business-structure
    You can be held personally liable for the debts and obligations of the business.
    Checked 2026-10-11.

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