Which of the following is a strength of a sole proprietorship?

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Question: Which of the following is a strength of a sole proprietorship?

Option 1: Unlimited life. This is incorrect as a strength because sole proprietorships typically have limited or no continuity; the business often dissolves when the owner dies or leaves. The legal entity is tied to the owner, so it does not have perpetual existence.

Option 2: Easy to form. This is the correct strength. Sole proprietorships are simple and inexpensive to establish with minimal regulatory hurdles, often requiring just local licenses and a business name registration. This ease of formation makes them attractive for individuals starting a small venture.

Option 3: Limited liability. This is false as a strength for sole proprietorships. In a sole proprietorship, the owner bears unlimited personal liability for business debts and obligations, putting personal assets at risk. This is a major disadvantage rather than a strength.

Option 4: Limited access to capital. This is incorrect as a strength; in fact, lack of access to capital is a common weakness for sole proprietorships because they rely largely on the owner's personal funds and may face constraints in obtaining loans or attracting outside investment.

Summary: Among the options, only Easy to form describes a practical strength of a sole proprietorship, while the others refer to vulnerabilities or mischaracterizations of the structure.

4510_CORPFIN_1002UAC Online Quiz 1

Which of the following is a strength of a sole proprietorship?

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Choose the correct answer from the below about sole trader

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4510_CORPFIN_1002UAC Online Quiz 1

Which of the following is a strength of a sole proprietorship?

查看解析

登录即可查看完整答案

类似问题

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

更多留学生实用工具

希望你的学习变得更简单

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