BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Easy to start
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Owner is their own boss
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Owner has unlimited liability
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Owner receives all the profits
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Detailed explanation-1: -Answer and Explanation: Unlimited liability (option a) is not an advantage of a proprietorship. Unlimited liability is an undesirable feature for a proprietorship because it means that the owner of the enterprise is personally responsible for all debts.
Detailed explanation-2: -Answer and Explanation: The statement is FALSE. Unlimited liability is a disadvantage of all sole proprietorships, and that is why limited liability is one of the biggest advantages of corporations. Unlimited liability means that the owner of a business remains personally liable for any actions against the business.
Detailed explanation-3: -The correct answer is option E) All of the above This type of business entity is free from legal formalities, and the owner possesses unlimited liability for the business. It is considered the least regulated form of business and is inexpensive to commence.
Detailed explanation-4: -Unlike corporations, sole proprietorships have unlimited liability and are legally responsible for all debts made against the business. With unlimited liability, business and personal assets may be at risk.