Which of the following is a characteristic of a sole proprietorship?

A sole proprietorship is defined by its structure of ownership and liability. One of its defining characteristics is unlimited liability, meaning that the owner is personally responsible for all debts and obligations incurred by the business. This contrasts with other business structures like corporations, which provide limited liability protection to their owners, preventing personal assets from being at risk for business debts.

In a sole proprietorship, because there is no legal separation between the owner and the business, any financial losses or legal issues experienced by the business directly affect the owner's personal finances. This aspect is crucial for individuals considering starting a sole proprietorship, as it can significantly impact their financial risk.

The other characteristics listed do not apply to a sole proprietorship. For example, shared ownership pertains to partnerships or corporations rather than a sole proprietorship, where one individual maintains complete control and ownership. Similarly, decision-making authority is centralized with the owner, who makes all operational decisions without needing to consult partners or a board. Lastly, a sole proprietorship does not exist as a separate legal entity, which further emphasizes the owner's personal liability.