Merideth Harper has invested $25,000 in Southwest Development Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. a) Under Sole proprirtorship, the owner receives all profits and sustains all losses. Here, the Owner has unlimited liability. Therefore, he is responsible for all the unpaid debts. His total wealth can be taken to satisfy the debts. b) If the Company is a 50-50 partnership company, then In Partnership,all partners have unlimited liability and each partner is legally liable for the unpaid debts according to the partnership. Here, the two partners are equally liable for the unpaid debts. Each partner is legally liable for $30,000 of the unpaid debts. c) In Corporations, owners have limited liability which guarantees that they cannot lose more than what they have invested. Here, the invested amount is calculated as a percentage of the total investment. Since the total investment is not given, the person cannot lose more than what he has invested.