What is a primary disadvantage of sole proprietorships?

The choice highlighting high risk and limited sources of capital accurately identifies a primary disadvantage of sole proprietorships. This type of business entity is owned and operated by a single individual, which exposes the owner to significant personal risk. If the business incurs debt or faces legal liabilities, the owner's personal assets can be at stake. This unlimited liability is a critical factor that contributes to the high risk associated with sole proprietorships.

Additionally, sole proprietorships often struggle to secure large amounts of capital. Access to funding is typically limited because they rely primarily on personal savings or loans, which can be more challenging to obtain without the backing of a larger organization or multiple owners. Hence, these financial constraints can hinder the growth and sustainability of the business.

Overall, while sole proprietorships offer simplicity and full control to the owner, the combination of high personal financial risk and limited capital access distinctly marks this business structure's disadvantages compared to other forms of business organization.