Which of the Following Is Disadvantage of a Sole Proprietorship

question 166

Multiple Choice

Which of the following is disadvantage of a sole proprietorship?

• A) The owner receiving all the after-tax profit.
• B) Unlimited liability.
• C) Quick decision making.
• D) Can be created through a simple business license.
• E) Less reliance on partners.

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Definitions:

Issuing Stock

The process by which a company sells new shares to investors to raise capital, often through a public offering.

Corporation

A legal entity separate from its owners, with rights to own property, incur liabilities, and sell shares.

Partnership

A lawful business arrangement involving two or more people who divide both management responsibilities and earnings.

Proprietorship

A business owned and operated by a single individual, also known as a sole proprietorship.