Question

What is the term that describes the fact that owners of sole proprietorships and partnerships arunlimited liabilitye totally personally responsible for all the debts of their firms?

Answer 1

The answer would be : unlimited liability.
If a company goes bankrupt , its liabilities and responsibilities does not change disappear. All of the shareholders that involved in the business are required by law to be liable for that liabilities if the company could not afford it anymore.