Which business structure is characterized by easy creation but unlimited liability?

The choice that embodies easy creation coupled with unlimited liability is the sole proprietorship. This business structure is the simplest form of ownership, allowing an individual to establish and operate a business with minimal formalities. Starting a sole proprietorship typically involves no complex paperwork or administrative processes, which makes it very accessible for entrepreneurs.

However, the defining feature of a sole proprietorship is that the owner is personally liable for all debts and obligations of the business. This means that if the business incurs debt or faces legal issues, the owner's personal assets, such as savings accounts, homes, and vehicles, can be at risk. This aspect of unlimited liability underlines the importance for sole proprietors to carefully consider their financial risks when choosing this structure for their business.

In contrast to a sole proprietorship, other structures like a corporation or a limited liability company provide limited liability protection, shielding owners from personal responsibility for business debts. Partnerships can feature shared responsibilities and potential liability as well, but they often entail more complexity in formation and operation compared to a sole proprietorship. Thus, the straightforward setup and accompanying risks define the sole proprietorship as the correct answer to this question.