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Because if the company gets sued, the sole proprietor could not only lose the entire company, he or she could also lose savings, home, credit, and everything else. In a limited liability structure, the creditors can usually only obtain whatever assets the company owns, not the property of the shareholders or members who do not actually manage the company.

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Q: 'why would unimited liability be considered as one of the biggest drawbacks to sole proprietorship'?
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