MANAGEMENT

BUISENESS MANAGEMENT

BUSINESS STRUCTURE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following is not an advantage of a sole proprietorship?
A
Easy to start
B
Owner is their own boss
C
Owner has unlimited liability
D
Owner receives all the profits
Explanation: 

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: -Sole proprietorships do not have the protection of limited liability. Instead, the sole owner has unlimited liability. This means that the sole owner is personally liable for the debts and expenses of the business. If the business is sued, the sole owner risks losing their personal assets.

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