The Major Reason Why Businesses Change from Sole Traderships to Other

question 92

Multiple Choice

The major reason why businesses change from sole traderships to other forms of ownership is to

• A) gain unlimited liability.
• B) avoid unlimited liability.
• C) avoid lack of continuity.
• D) obtain help and eliminate the problem of too much to do in one day.
• E) offer advancement opportunities for employees.

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Definitions:

Surety Bond

Insurance arranged in case a party to a contract fails to perform.

Contract Performance

The carrying out of the duties and obligations as stipulated in a contract by the involved parties.

Subrogation Right

The right for an insurer to pursue a third party that caused an insurance loss to the insured, in order to recover the amount of the claim paid.

Insurance Company

An organization that offers risk management to individuals or entities by providing compensation for losses in exchange for premium payments.