Under a sole proprietorship business can I be sued personally?

I am planning to start a book Rrntal service . I’m planing on registering as a sole propertiership. I need to know If I could be sued if there is any problem with the service I am providing?  For example, a delay in renting out books ? Under a sole propertiership, I have found: not a separate legal entity; owners have unlimited liability; cannot sue or be sued in its own name; cannot own property.

Asked on July 24, 2010 under Business Law, Alabama


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A sole proprietorship is not a legal entity. It refers to you as the person who owns the company and who is personally responsible for its debts.  You sign your name as an individual on all legal documents. If someone did sue the business then they would sue you personally as well.  This may not be the best way for you to operate the business.  You should really seek help from an attorney in the are that specializes in these types of matters or seek help from the Small Business Association in your area.  Someone needs to asses your personal situation: what you own, what needs to be protected, etc.  It can not be done in this forum.  Good luck.

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