Christie had a falling out with Frank and Matt and decided to open up her own shop – Christie’s

GlassWorks, selling windows on a retail basis. She decided to set up a sole proprietorship. At her grand opening, Eric was in the store and a window display fell over and hit him on the head. Eric sued Christie’s GlassWorks. Which of the following is true about Christie’s potential liability?

Christie cannot be held personally responsible; Eric’s insurance must pay for the claim.

Christie can be held personally liable to Eric because she is the owner.

Christie has no potential liability to the customer.

Christie can only be liable to the amount she initially invested in the business.


Vic and Ruthann are starting Victory Signs which will manufacture signs. If their primary objective is to ensure that they will be able to easily transfer ownership of Victory, which form should the choose?

sole proprietorship.

general partnership.

close corporation.


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