Which of the Following Is True of a Business Operating

question 72

Multiple Choice

Which of the following is true of a business operating under sole proprietorship?

• A)It is not considered a separate legal entity.
• B)It cannot be sold when the owner decides to do so.
• C)It requires governmental approval when being transferred.
• D)It has access to unrestricted capital by means of investments.

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Definitions:

Agency Relationship

A legal arrangement where one party, the agent, is authorized to act on behalf of another, the principal, in business transactions.

Principal

A person or entity who authorizes an agent to act on their behalf in dealings with third parties.

Constructive Trust

A legal remedy imposed by a court to address unjust enrichment or fraud, requiring the person holding the assets to transfer them to the intended party.

Lakeside Property

Real estate located adjacent to or near a lake, often highly valued for its view, recreational opportunities, and environmental quality.