Asked by Raney Sumpter on Jul 20, 2024
Verified
Which of the following is disadvantage of a sole proprietorship?
A) The owner receiving all the after-tax profit.
B) Unlimited liability.
C) Quick decision making.
D) Can be created through a simple business license.
E) Less reliance on partners.
Sole Proprietorship
A business structure where a single individual both owns and runs the company, bearing unlimited personal liability for its debts.
Unlimited Liability
A business structure where the owners are personally responsible for all of the company's debts and liabilities.
Business License
A legal authorization to operate a business in a particular municipality, region, or country, often requiring renewal and compliance with specific regulations.
- Recognize the dissimilarities in fiscal responsibilities pertaining to diverse organizational structures.
Verified Answer
QB
Quori BlakeneyJul 20, 2024
Final Answer :
B
Explanation :
Sole proprietorships expose the owner to unlimited liability, meaning the owner is personally responsible for all the business's debts and obligations. This can put the owner's personal assets at risk.
Learning Objectives
- Recognize the dissimilarities in fiscal responsibilities pertaining to diverse organizational structures.