Which of the following is a disadvantage of a sole proprietorship?

A sole proprietorship is a business structure where a single individual owns and operates the business. One significant disadvantage of this structure is that the owner is personally liable for all business debts. This means that if the business incurs debt or faces any legal issues, the owner's personal assets, such as savings, property, or other possessions, can be at risk to satisfy the business’s obligations.

This personal liability can be a considerable risk for the sole proprietor, especially if the business encounters financial difficulties or lawsuits. The lack of liability protection can deter potential investors or lenders, as they may view a sole proprietorship as a higher risk due to the owner's exposure to personal financial loss.

In contrast, shared control, tax advantages over partnerships, and the ability to raise capital easily do not apply as disadvantages for sole proprietorships. In fact, having sole control means decisions can be made quickly without the need for consensus, and there are typically fewer formalities in management.