ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Contracts are needed to start the businesses.
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Owners have complete control of the business.
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Owners have limited legal liability.
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The businesses are owned by one person.
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Detailed explanation-1: -Sole proprietors have complete control and ownership rights of their businesses. Sole proprietors are the only owners of their businesses and can make all decisions on their own.
Detailed explanation-2: -Partnerships can be very similar to Sole Proprietorships in the sense that the business is not necessarily an independent entity; in the simplest form of Partnership, all partners contribute capital and all are fully liable for business debts.
Detailed explanation-3: -Similar Legal Entity In a sole proprietorship or partnership legal structure, the law does not consider the owner of the business or the partners as a separate legal entity. In this way, the business cannot make contracts, obtain assets, sue or be sued in its own name.
Detailed explanation-4: -A sole-proprietorship has one owner who has unlimited liability for the business. A partnership involves two or more people who combine resources for the business and share profits and losses. A corporation is considered to be a separate legal entity from its shareholders. For tax purposes a corporation is a “Person”.
Detailed explanation-5: -Sole Proprietorship and its Advantages In a sole proprietorship, as the owner, you have complete control over your business. You make all important decisions and are generally responsible for all day-to-day activities.