Q.State any two limitations of Sole Proprietorship.

Despite its advantages, Sole Proprietorship has real drawbacks that limit how far the business can grow. …

Sole Proprietorship, while simple to run, carries genuine limitations that become more serious as a business tries to grow. Two of the most significant are:

1. Unlimited liability — if the business cannot meet its debts from business assets, the owner's personal property can be taken to settle them, putting the proprietor's personal wealth at risk.
2. Limited capital — since the business depends mainly on the proprietor's own savings and personal borrowing capacity, there is a natural ceiling on how much capital can be raised, which restricts expansion. …

Do not confuse 'limited capital' with 'limited liability' — they are opposite kinds of limitation. Sole Proprietorship has NO liability protection at all; the limitation is on how much …