Sole Proprietorship Liability: Who Is Liable for Poisoned Cake at Wedding Party?

Who is liable for a poisoned cake at a wedding party catered by a sole proprietorship?

a) Only the employee who poisoned the cake is liable.

b) Only the sole proprietorship is liable.

c) The corporation is liable.

d) Only the partner is liable.

Answer:

Only the sole proprietorship is liable for poisoning the cake. So, option b) is correct.

A sole proprietorship, also known as a sole tradership, individual entrepreneurship, or proprietorship, is a type of business owned and operated by a single person with no legal distinction between the owner and the business organization.

The sole trader is personally liable for any losses and debts of the business. In this scenario, if an employee of the sole proprietorship corporation poisons the cake, the sole proprietorship itself is held liable for the actions of its employee.

It's important to note that in a sole proprietorship, the owner is solely responsible for all aspects of the business. They are accountable for the actions of their employees and any consequences that may arise from those actions.

Being aware of the liabilities and responsibilities of running a sole proprietorship is crucial for business owners to protect themselves and their business.