One of the Chief Disadvantages of a Wholly Owned Subsidiary

question 11

Multiple Choice

One of the chief disadvantages of a wholly owned subsidiary is that:

• A)complete ownership means that the parent company will have to carry the full burden of potential losses
• B)it is often perceived as generating low profits.
• C)it is often perceived as having problems in supply lines.
• D)it is often perceived as being more expensive
• E)it is often perceived as a threat to the local media for promotion.

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Definitions:

Sole Proprietorship

A business structure in which a single individual owns and operates the business, bearing sole responsibility for its debts and liabilities.

UPA

Stands for Uniform Partnership Act, which is a set of laws adopted by various states in the United States that governs partnerships.

Article of Partnership

A written agreement that outlines the terms, conditions, and responsibilities of each partner in a partnership.

Partnership Contract

A legal agreement between two or more parties who wish to manage and operate a business together in order to share its profits.