Asked by Serena Espino on May 29, 2024
Verified
Which of the following is true about a sole proprietorship?
A) A sole proprietorship is a legal entity.
B) A sole proprietorship cannot sue or be sued.
C) A sole proprietorship as form of business can be transferred to someone else.
D) A sole proprietorship has a life of its own apart from its owner.
Legal Entity
An organization or system that has its own legal identity, allowing it to own property, enter into contracts, and be sued or sue.
Sole Proprietorship
A business structure where a single individual owns and operates the business, bearing full responsibility for its debts and obligations.
- Familiarize yourself with the unique aspects and organizational structures of various business models, including corporations, sole proprietorships, partnerships, and limited liability companies (LLCs).
- Conceptualize the life span of different business entities and the factors affecting their continuity.
Verified Answer
MA
Miguel AngelMay 29, 2024
Final Answer :
B
Explanation :
A sole proprietorship is not a legal entity.It cannot sue or be sued.Instead,creditors must sue the owner.The sole proprietor-in his own name-must sue those who harm the business.
Learning Objectives
- Familiarize yourself with the unique aspects and organizational structures of various business models, including corporations, sole proprietorships, partnerships, and limited liability companies (LLCs).
- Conceptualize the life span of different business entities and the factors affecting their continuity.