Which type of business model typically has a registered owner and involves personal liability?

The sole proprietorship model is characterized by having a single registered owner who is personally liable for all debts and obligations of the business. This structure is the simplest among business models, often chosen for its ease of formation and less regulatory burden.

In a sole proprietorship, the owner and the business are legally the same entity. This means that any debts or liabilities incurred by the business directly affect the owner's personal assets. Therefore, if the business runs into financial difficulties or faces legal issues, creditors can pursue the owner’s personal assets, such as their home or savings, to satisfy business debts.

In contrast, other business models like partnerships or limited partnerships distribute liability among multiple parties, providing some level of protection for individual owners. For example, in a franchise model, while there can be a registered owner, the franchise operates under the umbrella of the franchisor’s brand, which often has different liability provisions. Thus, the defining feature of the sole proprietorship is the combination of being the registered owner and the exposure to personal liability for business-related debts.