Mr Smith is a sole trader. He operates a painting and decorating business under the name 'Smith's Painters & Decorators'. Select the correct statement in respect of Mr Smith's business:

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Question restatement: Mr Smith is a sole trader. He operates a painting and decorating business under the name 'Smith's Painters & Decorators'. Select the correct statement in respect of Mr Smith's business.

Observation about answer options: The provided data shows an answer list containing one statement: "Mr Smith owns and controls the business." However, the answer_options array is empty in this input, so there are no alternative statements for comparison.

Step-by-step analysis:
- Context of a sole trader: A sole trader is an individual who owns and runs a business on their own, bearing all profits and losses, and having full personal control over business decisions. There is no separate legal entity from the owner, unlike a company where shareholders and directors separate liability and control.
- Statement under evaluation: "Mr Smith owns and controls the business." This statement aligns with the fundamental characteristics of a sole trader, where the proprietor both owns and governs the business operations.
- Why this statement is consistent: If Mr Smith operates as a sole trader, he would legally own the business assets and be responsible for decisions, revenue, and obligations. The ownership and control are centralized in one person, which is the defining feature of sole proprietorships.

Potential issues if there were other options (hypothetical):
- If another option claimed the business is a separate legal entity from Mr Smith (as a company would be), that would be incorrect for a sole trader structure, since there is no separate corporate veil.
- If an option suggested that Mr Smith shares ownership or control with partners or directors, that would contradict the nature of a sole trader.
- If an option stated Mr Smith cannot manage or decide on day-to-day operations alone, that would also conflict with the typical autonomy of a sole proprietor.

Practical takeaway: Given the nature of a sole trader, the statement that Mr Smith owns and controls the business is consistent with how such businesses operate, even though we do not have other competing statements to contrast.

BUSINESS 114 BUS114 Module 05: Pre-workshop quiz (Business Structures)

Mr Smith is a sole trader. He operates a painting and decorating business under the name 'Smith's Painters & Decorators'. Select the correct statement in respect of Mr Smith's business:

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BUSINESS 114 BUS114 Module 05: Pre-workshop quiz (Business Structures)

Mr Smith is a sole trader. He operates a painting and decorating business under the name 'Smith's Painters & Decorators'. Select the correct statement in respect of Mr Smith's business:

View Explanation

Log in for full answers

Similar Questions

Which of the following is an advantage of a sole trader business?

What is a key feature of a sole trader business?

A sole proprietor has Blank ______ personal liability for all business debts and obligations.

Which of the following entities is a “sole trader”?

If Sally owns her own business and pays for its expenses on her credit card, she is most likely a(n) Blank ______ and is Blank ______ for all her credit card charges. BlackTom题目解析

Choose the correct answer from the below about sole trader

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

If Sally owns her own business and pays for its expenses on her credit card, she is most likely a(n) Blank and is Blank for all her credit card charges. BlackTom题目解析