The statement provided is true. When an entrepreneur is choosing the organizational form for their business, they do consider the liability of the owners for the acts of the firm. Here's why:
1. **Sole Proprietorship:** In a sole proprietorship, the owner has unlimited liability. This means they are personally responsible for all debts and obligations of the business. If the business cannot pay its debts, creditors can come after the owner's personal assets.
2. **Partnership:** In a general partnership, all partners have unlimited liability. Each partner is personally responsible for the debts and obligations of the partnership, as well as for the actions of the other partners.
3. **Corporation:** In a corporation, the owners (shareholders) have limited liability. This means their personal assets are generally protected from the debts and liabilities of the corporation. Shareholders are only liable up to the amount they have invested in the corporation.
So, when deciding on the organizational form for a business, an entrepreneur will consider the level of liability they are willing to take on personally for the business's actions.
