ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Sole proprietorships are easy to establish and dismantle due to a lack of government involvement, making them popular with small business owners and contractors. Most small businesses start as sole proprietorships and end up transitioning to a limited liability entity or corporation as the company grows.

Detailed explanation-2: -Which of the following is FALSE regarding a sole proprietorship? A sole proprietor is not personally liable for obligations of the business. This is False B/C A sole proprietor is personally liable for any losses or obligations associated with the business.

Detailed explanation-3: -A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

Detailed explanation-4: -The sole proprietorship business can be started easily by just one person. There is minimum compliance that is required to be adhered to get it incorporated. This form of business is economical as it is relatively less expensive to start than a company or LLP.