One Disadvantage of a Sole Proprietorship as a Form of Business

question 96

Multiple Choice

One disadvantage of a sole proprietorship as a form of business organization is that

• A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
• B)sole proprietorships are less efficient than corporations, because they are less specialized in production
• C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
• D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm
• E)owners of sole proprietorships generally have very little control over how they operate their businesses

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Definitions:

Participation Rate

The percentage of eligible individuals or entities that take part in a particular program or activity.

Wholesale Trade

The business of selling goods in large quantities at lower prices to retailers or other businesses, rather than selling to consumers directly.

Transportation

The system or means by which people or goods are moved from one place to another, which can include vehicles, infrastructure, and operations.

Human Resource Strategies

Plans and actions undertaken by a company's human resource department to achieve specific organizational goals related to employee management and development.