5.Larry has opened his grocery store in Eaton, Ohio. He is operating in a relatively profitable fashion. However, on November 10, 1999, a young woman enters his store and slips and falls on a large puddle of water which has existed on the floor for some period of time. Larry knows the puddle was there because he has a leaking refrigeration unit, but has taken no steps to assure that the puddle is kept under control. AS a result of her fall, the young lady is significantly injured and successful sues Larry for 1.5 million dollars. Larry has insurance coverage in the amount of 1 million dollars. Upon receiving the payment of 1 million dollars from the insurance company, the young woman seeks to attach Larry's personal property. His vehicle and his home to satisfy the remainder of the judgment. Can she do?

A.Yes. The owners of all business entities are personally responsible for injuries suffered by patrons on their business premises. Therefore, Larry is responsible to this young woman for all of her injuries and is personally liable for any amount in excess of the insurance.

B.Yes. As a sole proprietor, Larry has unlimited liability. Unlimited liability means that you are responsible not only for the investment that you have in the business, but you are also personally responsible for all liabilities of the business. This is a distinct disadvantage of the proprietorship form of business.

C.Yes. While Larry is a sole proprietorship and is subject to unlimited liability, that liability does not extend to his personal property. He is only liable to the extent of the value of the business, and his personal assets cannot be attacked.

No. As a sole proprietor Larry has limited liability and is only subject to damage to the extent of his initial investment.